Since 2004, the BME Association for Supply Chain Management, Procurement and Logistics has teamed up with the University of Würzburg and HTWK Leipzig University of Applied Sciences to conduct surveys in the run-up to the annual ‘BME-eLösungstage’ on the use of electronic procurement systems. The current issue of BME-Barometer examines the state of electronic procurement as well as the future development of digitalisation in selected areas of purchasing and supply chain management. A total of 264 procurement managers mainly from industry and the service sector, about half in large companies and the other half from SMEs, were surveyed this year. Three key findings from this study have been distilled for us by Florian Holzmann, managing partner of the Düsseldorf consulting agency HÖVELER HOLZMANN.
Crucial survey findings you should know:
The lack of internal data transparency and structuring is cited as the main factor hampering further internal digitalisation.
Florian Holzmann: I don’t understand this obstacle. After all, digitalisation in particular can lead to increased transparency in the short term and definitely does so in the medium term. The poor transparency at the moment is nearly always due to either a lack of digitalisation or processes with several media discontinuities. Manual data entry and orders placed via different, unintegrated systems such as email, fax, telephone, etc. are especially error-prone. If the purchasing department is to take correct decisions, the quality of this data urgently needs to be improved. In my experience, the main factors slowing down digitalisation vary depending on the size of the company:
Ninety-two per cent of respondents consider the use of e-tools more important in supplier management than in any other area of procurement.
Florian Holzmann: That doesn’t come as a surprise. The respondents’ overall view is that electronic tools need to be used in nearly all procurement tasks. That’s easy to understand as digitalisation already supports employees in all business activities – which of course also feature in strategic fields – and in some cases completely relieves them of certain tasks. The fact that e-tools are regarded as even more useful in supplier management than anywhere else is doubtless due to the enormous amount of time otherwise required in most companies to compile all the necessary information on each supplier. Ideally, a whole raft of data sources is used to collect all the information about a supplier’s future development or to start looking for an alternative in good time. Digital tools can help aggregate the various data sources such as the internal ERP system, market/index developments and the supplier’s economic development, and display them at a glance. Having high-quality data is vital. If it’s not available yet, it can still be obtained by tweaking processes and tools.
Nearly 80 per cent of the respondents are satisfied with the state of digitalisation in their company in the area of uniform process, while the figure for decentralized departmental requirements and centrally planned demand is still 73 per cent.
Florian Holzmann: There’s clearly been progress in recent years, particularly in terms of no-touch orders. Even so, I don’t get the high satisfaction in these areas. Sure, respondents might be satisfied when comparing the current state of digitalisation in their own firm with what it was two years ago. But bearing in mind today’s technical possibilities, in my experience there’s usually still plenty of room for improvement, especially in medium-sized companies.
Who writes here?
Florian Holzmann is a managing partner at Höveler Holzmann Consulting GmbH. He specializes in information management and process optimisation in supply chain management and procurement. He majored in business informatics at the University of Cologne, specializing in supply chain management.