Nothing Gets Past the Lead Buyer
Freudenberg Sealing Technologies is a supplier, and a development and service partner in different branches, including the automotive industry, aviation, mechanical engineering and shipbuilding; the food and pharmaceutical industries, and the agricultural and construction industries. Beginning with Simmerring®, which was developed by Freudenberg in 1929, Freudenberg Sealing Technologies now has a diverse, customer-oriented portfolio of sealant and oscillation technology ranging from customized, individual products to complete sealing packages. In 2013, as the largest Freudenberg group, Freudenberg Sealing Technologies reached a turnover of nearly 2 billion Euros with approximately 17,000 employees.
All large, global vehicle manufacturers use sealant solutions from Freudenberg Sealing Technologies. For OEMs and tier-1 companies, the use of communication and procurement portals is nothing new.
A smart supply base management system and seamless mapping of the supply chain are the cornerstones of modern purchasing. Freudenberg Sealing Technologies is quickly heading in this direction with their continuous optimization projects.
Purchasing at Freudenberg Sealing Technologies is set up globally. The main regions with the primary strategic purchasing organizations are in Plymouth, USA, and in Weinheim, Germany, although central management for purchasing is in the USA. The strategic starting point for introducing a supply base portal was Europe due to the size, complexity, and system environment in the region. The goal was to create a holistic central supplier database where all existing and potential suppliers could be found easily. Freudenberg Sealing Technologies would thereby achieve increased transparency and would improve its market position. The challenge was about creating an easily manageable and compact supply base portal from all of the different requirements that range from raw materials, machines, and tools to indirect materials.
When the project began, Freudenberg Sealing Technologies had already successfully implemented a comprehensive SCM project to automated order processes and to streamline logistics processes with JAGGAER.
The solution was then expanded. By implementing a modern supply base portal, the company can already identify high performance vendors during the vendor selection process. The process did not always run systematically. Registration was completed on the website, but before a vendor could actually be accepted, several e-mail exchanges were usually necessary. JAGGAER has now made things simpler for the purchasing team by completing all of these manual tasks with the help of workflows that run in the background.
If a supplier applies on Freudenberg’s homepage, they will receive a link for a pre-registration form. Then, a verification takes place using D-U-N-S® number in order to avoid duplicate entries in the system. By defining the primary commodity group, the vendor is then assigned to the appropriate Category Manager, who is responsible for deciding how the vendor should be included in the central vendor database. The goal of the online portal is to screen the entire spectrum of vendors through the use of profile questions for specific commodity groups during that onboarding process, for example. This makes it easier for the Category Manager to reach a decision when going through vendor applications.
In JAGGAER, vendors who are already in SAP are also taken into account. The two-way syncing with the SAP ERP via a single interface guarantees that JAGGAER always has the most up-to-date data available. The continuous maintenance of primary data is left to the vendor, which further relieves Purchasing of manual duties. For verifications and customer audits, the purchasing tool makes it easy to access the most current information. Vendors must upload their most up-to-date certificates, and verify the expiration dates, during registration, which makes certificate management significantly easier. Documents which are important for successful cooperation, such as non-disclosure agreements, quality guidelines, or corporate compliance documents, are also uploaded. When documents expire, the system reminds the vendor to upload the most current documents. These are then centrally available and are not stored in a separate system, as it was previously.
Goals Reached with JAGGAER
- Increased transparency with central supplier database
- Systematic vendor onboarding with automatic workflows
- Clean database thanks to D-U-N-S® number and duplicate check
- Commodity-specific profile questions during vendor registration
- Most current data by syncing with SAP system
- Automated Certificate Management
- Standardized sourcing processes with RFQ module
- Detailed cost breakdowns at category level
Transparency in Global Sourcing
The comprehensive database includes existing vendors from the SAP system, as well as suppliers who have just recently applied. Saving a commodity for each supplier makes it possible for the buyer to only search for vendors that are immediately relevant. The RFQ Module functions automate and standardize this process. After the bids are submitted, the buyer can compare and analyze the prices using different methods. The Category Manager can run through various scenarios in the system and can then use the results to evaluate the vendor. In global sourcing, it is essential to link vendor selection to TCO estimates. JAGGAER has detailed cost breakdowns available at the category level, which Freudenberg Sealing Technologies is currently using. Every buyer can now access past RFQs, and can benefit from existing RFQ structures or from prices requested by their colleagues.