A Stronger Chain of Command

Powerful Essays
A stronger chain of command
By Daniel Schäfer in Frankfurt
Published: October 11 2010 23:09 | Last updated: October 11 2010 23:09
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|Engineering change: Siemens has made supply chains a priority |

When Barbara Kux arrived at Siemens in late 2008 to head the German engineering group’s newly created supply chain management organisation, she soon discovered how badly her appointment had been needed.

On evaluating Siemens’ supplier base, she was astonished to discover that Europe’s largest engineering company listed some of its 113,000 suppliers several times in its purchasing databases.

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The discovery laid bare the lack of transparency and the inefficiencies in the group’s decentralised purchasing system.

Ms Kux’s experience will be familiar to many large and medium-sized industrial companies with gargantuan but cost-saving potential hidden in dispersed purchasing departments.

While last year’s economic crisis forced companies to concentrate on short-term working capital reductions such as bringing down inventory levels, the recovery is prompting many to implement broader improvements in the supply chain.

A recent global study by Capgemini, the consultancy, revealed that improvement of customer service and supply chain processes have replaced the economic downturn at the top of supply chain managers’ agenda.

Martin Raab, head of supply chain management at Capgemini, says: “A lot of companies are currently thinking about ways to make their supply chains more transparent and

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