DHL 2005 Annual Report Download - page 50

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both report to the Head of Corporate Procurement. is matrix structure ensures that
requirements worldwide are bundled together at Group level and, at the same time, that
we meet the service and quality requirements of internal customers.
Each year, we procure indirect goods and services worth approximately €6.3 billion. ese
are goods and services that are not direct components of pricing, such as vehicles and IT.
Transportation services, which account for the majority of direct products and services,
are procured mainly by the corporate divisions. Procurement was restructured as part
of STAR, with the aim of working more eciently while cutting procurement costs. We
made savings in all product categories in 2005 and thus substantially exceeded the forecast
contribution to STAR of almost €300 million.
Key initiatives in the year under review were as follows:
• In Europe, we used Internet-based procurement processes to enter into master agree-
ments for heavy commercial vehicles with a term of two years.
• When procuring production equipment, we were able to work with suppliers to cut sig-
nicantly the cost of sorting systems using value analysis techniques.
• We reduced the number of agencies in Germany and Europe that Group employees use
to organize their business travel.
• In the previous year, we invited tenders for all the Group’s marketing and media services
and focused on a small number of global service providers. is successful method has
been extended to other areas.
Processes and systems standardized
We introduced an electronic order-processing system. More than 6,500 sta already use
this SAP-based system in Germany, France, Poland and the United States. Before it was
introduced, an international team standardized all procurement processes – from the ini-
tial request through to payment.
We launched a global supplier management system at the beginning of 2005. Together
with its internal customers, the procurement department regularly reviews the perfor-
mance of key suppliers, including whether they fulll our ethical and ecological require-
ments. is enables us to counter potential weaknesses at an early stage.
Research and development
As a pure service provider, Deutsche Post World Net does not perform any research and
development activities that would be comparable with those of manufacturing companies.
is section therefore does not contain any disclosures.
Internal Group management system
We are once again reporting economic prot in addition to the EBIT performance indica-
tor as part of our value-based Group management. With economic prot we measure the
value that we generate for our shareholders from operations, taking into account the total
cost of capital used to generate revenue and prots.
Procurement expenses
Volume: approx. €6.3 billion
13.9% Ground fleet
8.1% Network supplies
5.3% Production systems
16.1% Real estate
26.3% Services
24.0% IT &
communication
6.3% Air fleet
Annual Report 2005
46