According to data from McKinsey, only 17 percent of Polish companies have a defined supplier relationship management process. Additionally, most buyers are not actively looking for new suppliers. On the other hand, the pandemic, the war in Ukraine and inflation are changing the role of purchasing departments. From the responsibility to cut costs, their role evolves into a strategic function in the organization that is supposed to provide resistance to shocks. An example of a company that implements the strategic vision of the purchasing department is Xella Polska.
Jacek Czapliński, Senior Implementation Manager at McKinsey, presented during the SAP CPO Roundtable event the main conclusions from the study of the maturity of the purchasing function in Polish companies, conducted together with the Polish Association of Logistics and Purchasing Managers in 2021-2022. It turns out that as much as 80 percent. companies declare investments in digitization in the area of procurement, but there are few entities in Poland that approach the transformation of this area in a strategic manner. Rather, most focus on digitizing single processes. Moreover, only 55 percent. purchases in the surveyed organizations are made with the use of digital platforms implemented in them. This means that Polish business does not sufficiently use the potential of digitization in procurement.
This is all the more surprising as global trends are changing the nature of buyers’ activities and their role in the organization towards comprehensive purchasing platforms as mandatory trading tools. Disruptions in supply chains caused by the pandemic and war in Ukraine, rising inflation and the lack of experienced specialists in the labor market, mean that purchasing departments are expected to build the company’s resilience to crises by expanding the network of suppliers and using technological and process levers. The days of simply cutting costs and using commercial levers to generate savings are over.
“Today, the merchant is to be a sparring partner for business. At Xella Polska, procurement experts work in project teams with business representatives to jointly develop optimal solutions. We see a huge difference between a purchasing strategy and the strategic importance of procurement. The role of buyers is to constantly expand the business network of our organization and establish relationships with partners who may not be our suppliers at the moment, but who may become suppliers when the need arises,” says Aleksandra Kwapis, Director of the Purchasing and Logistics Department, Xella Polska.
The Xella Group is the world’s largest producer of aerated concrete and silicate building materials, owner of the Ytong, Silka and Hebel brands. There are 11 production plants of the group in 11 locations in Poland. Xella chose SAP Ariba solutions to standardize and digitize purchasing processes in a global capital group. The ongoing implementation works are aimed at realizing the strategic vision and the role of purchasing in creating the business resilience of the organization.
“Before the implementation of SAP Ariba solutions, the purchasing process in the Xella group was very fragmented. The challenge was also to improve the flow of key documents for the entire purchasing cycle, such as contracts and orders. The implementation of contract management modules and cooperation with suppliers significantly shortened the processes within the group and made it possible to standardize activities and standards in cooperation with contractors. The next stage of implementation is the guided sourcing module, which will complete the strategic transformation of digital procurement at Xella,” says Paweł Mamcarz, Associate Partner at ap-solut Polska.
An important element in Xell’s strategy is expanding the organization’s business network. As the research by McKinsey shows, 9 out of 10 managers responsible for purchasing in their companies immediately after the start of the pandemic assured that they had to change their purchasing strategies, e.g. expanding the group of suppliers. Over 90 percent leaders who declared to introduce changes implemented them over the next 12 months by expanding their business networks.
“Pandemic, blocked Suez Canal, war in Ukraine – recent years have shown that with unstable supply chains we can no longer rely only on a few proven business partners. The key to business resilience in challenging times is a community that provides flexibility and enables you to react quickly when your current supplier or transport channel fails. Such a business community is developed by SAP, connecting suppliers, buyers and carriers from all areas of the economy within the SAP Business Network. By optimizing purchasing processes and helping companies to find new suppliers, we jointly create value for the global economy,” says Dorota Zaremba, Vice President of the Management Board of SAP Polska.
The organizer of the CPO Roundtable event was SAP Polska, and the partners were ap-solut, LST Westernacher and Apollogic.
