Mercedes 2002 Annual Report Download - page 64

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Continued implementation of global procurement
management
In 2002, DaimlerChrysler purchased goods and services
valued at 1102.1 billion (2001: 1106.5 billion). For
the automotive divisions alone, Global Procurement &
Supply (GP&S) purchases were worth 199.8 billion
(2001: 1101.2 billion).
Due to stronger competition between suppliers,
GP&S aligned its organization and processes to enhance
global coordination, and to accelerate the internal
transfer of knowledge and technology. These measures
are designed to optimize the global supply base.
Global procurement focused on efficient suppliers
Intense competition within the automotive industry and
the increasing complexity of vehicles mean heavier
demands on suppliers. The selection of cost-efficient
suppliers and the utilization of economies of scale are
thus becoming increasingly important. DaimlerChrysler
purchased about 40% of its goods and services in
Germany during the period under review, and a further
8% in other countries of the European Union. North
America’s share was around 48%. Due to the sharper
focus on Asian markets, we are also intensively analyz-
ing the potential for more procurement there.
In 2002, approximately 700 online bidding events
were processed via the Covisint Internet platform.
Covisint, a company whose shareholders include
DaimlerChrysler and several other automobile manu-
facturers, provided the required technology and
carried out the bidding procedures. This underscores the
increasing importance of online bidding as an efficient
procurement instrument.
Global Procurement & Supply
58 |Global Procurement & Supply
New organization and processes for global
procurement
In order to achieve cost savings combined with im-
proved quality for non-production material (goods which
do not flow into our products, but which are needed
for their production, such as machines), the new Inter-
national Procurement Services (IPS) organization
has been formed, so that materials with global synergy
potential are purchased by just one department.
GP&S also implemented a lead-buyer model for pro-
duction material (goods which flow directly into the
products, such as steel, paint or tires) so as to enhance
communication and coordination among the procure-
ment departments of Mercedes Car Group, Chrysler
Group and the Commercial Vehicles division. The lead
buyers oversee the procurement of certain materials
and parts, worldwide, in cooperation with the buyers for
each vehicle brand.
This reorganization of GP&S represents a major
milestone in leveraging DaimlerChrysler’s purchasing
power more effectively and managing resources
globally.
Standardized information technology and processes
To facilitate the work of the new organization, processes
were standardized and a common commodity coding
system was established for all parts and components
to be purchased. Based on state-of-the-art information
technology, existing procurement systems across
all GP&S operations were integrated to enable a global
flow of information. A data warehouse provides the
detailed information needed for worldwide commodity
management.
Total purchasing valued at 3102.1 billion |New organization
for global procurement |Significant reduction in variety
of components