As an internal provider of services, Strategic Sourcing and Trading (SST) is rarely in the limelight. That‘s unfortunate. With just twelve employees, it is responsible for a purchasing volume of more than 119 million euros. Currently, in view of the scarcity of resources, interrupted supply chains, and delivery fluctuations and delays, the work is truly a Herculean task.
SST was first created in 2014 and has been part of the Industrial Services Division since 2015. What are its tasks? SST sources the seals that FST Lead Centers do not produce themselves, even handling the price negotiations for them. Strategic supplier management is the foundation of its work. With the help of audits and other tools, SST checks and ensures product quality as well as the performance and reliability of FST‘s suppliers.
SST was repositioned on August 1, 2021. Until now, this was all organized regionally. Furthermore, the work took place separately for Freudenberg and Dichtomatik, which in some cases led to overlapping functions and redundant measures. The key phrase here is “double the work.” That is precisely what the new lean structure avoids. The processes are uniform, and synergies are systematically exploited.
The biggest change: Strategic sourcing now takes place from a single source for both product brands – and with a clear differentiation of roles based on tasks. This is accomplished efficiently and with higher quality since individual employees specialize in – and are experts on – individual product groups. “With these improvements in efficiency and those that have been initiated since 2018, we will have reduced organizational costs by 35 percent by 2022 – with improving performance,” said Rob Martell, Director Global Strategic Sourcing.
A presence for two brands
With FST’s market positioning and by acting on behalf of both the Freudenberg and Dichtomatik product brands, the company is handling larger purchasing volumes and strengthening its negotiating position and effectiveness. This especially reflects the gradual organizational and legal integration of all the former Dichtomatik locations into FST. People talk about the “customer centricity” resulting from a complete FST portfolio from a single source. But the approach is just as valid for sourcing within the internal customer-supplier relationship between “service provider” SST and its customers, the Lead Centers.
The unit’s organization would likely have been inconceivable before the Covid-19 epidemic. Josh Swartz, Manager, Supply Strategy, offered a practical example of digitalization in the workplace that played into the changes. “From the United States, I manage a cross-regional team whose three members are all in Germany,” he said. International cooperation has led to a new distribution of roles across all of strategic sourcing after just a few months. “It worked out tremendously. The team did a great job,” Martell said.
