Procurement Manager at ERIKS
ERIKS is an international industrial service provider that offers a high-quality and wide range of mechanical engineering components and technical / logistical services. ERIKS supplies approximately 200,000 industrial customers, has an assortment of more than 680,000 articles and provides more than five million shipments per year. Thanks to its broad and deep range and the excellent know-how of the products and their applications, ERIKS plays a leading role in Europe in its field. The ERIKS group consists of more than 350 branches in 21 countries. The geographic center of gravity of the activities is in Europe and North America where approximately 95 percent of the turnover is realized.
ERIKS suppliers are spread throughout the northern hemisphere worldwide. ERIKS strives to automate the procurement process as much as possible. A predictable flow of deliveries with a real-time insight into the status of all purchase orders is the starting point. ERIKS does not only use Tradecloud as an e-procurement procurement tool, but also as a platform for sales to receive and confirm sales orders for customers. ERIKS supplies components to machine builders such as Nooteboom and Agrifac and these are companies that have been working with Tradecloud for longer to streamline their procurement. In this way, the Tradecloud platform is used in two ways: as a buyer and as a supplier.
“It became clear that we could automate a lot of manual work. There is a lot of time involved in processing all order confirmations. If the details about orders are unclear, you will see that it immediately generates more internal communication between Purchasing and Sales employees. The Sales colleagues want to keep their promises to customers. If there are uncertainties from Purchasing, we immediately notice this because of the increase in internal communication. The more grip we get on the supply chain, the more often the sales department colleagues can deliver on their promises to the customer.”
“We are now fully in the first phase. Together with Tradecloud we have created a procedure for the implementation. We connect 30 of our foreign suppliers in clear steps. In the selection, Tradecloud checks which of our suppliers are already present in their network. Because Tradecloud focuses on the industrial sector, there is a chance that they will already work with Tradecloud. When a company is already connected to the network, it speeds up the implementation. Suppliers have, depending on their automation, the choice to connect with an EDI link or directly via the cloud platform of Tradecloud.”
“I expect the speed in the process to increase. Ordering is quicker and you can see that orders from suppliers are also processed faster. A big advantage is that this information is therefore available to us earlier. As a result, we do not have to coordinate less with our Sales colleagues on a daily basis, as a result of which they can improve the performance to our customers. The nice thing is that there is a decrease of factually unnecessary manual work. There is no need to repeat order confirmations and packing notes. The coordination of orders that can be transported, for example, is still done manually. Finally, I see an improvement in communication with the suppliers. The agreements are well shared and because we work in the same platform, communication is no longer necessary via e-mail or telephone.”
With Tradecloud it is possible to manage the entire purchase to pay process. In addition to automating the order flow, Tradecloud offers possibilities for central parts management, shipping, invoicing, predictions and analytics. Does Rob expect to also use these modules?
“In this phase we are focusing on a successful connection of these 30 suppliers. Managing the order flows is the core. After the test we will evaluate and look ahead to more possibilities. I think that the analytics that we can now extract from Tradecloud are certainly usable. We now measure supplier reliability in SAP BI (Business Intelligence), but that information can now also be seen in Tradecloud. In this test phase we get more experience with the metrics in the Tradecloud portal and after that we will decide which data we will use as control data. We want to use the billing module of Tradecloud. At this moment our invoices are still scanned manually, so we can also automate a lot. Furthermore, we use Slimstock to predict our material requirements towards our suppliers. Possibly we are going to find out if we can make a link to exchange data between Tradecloud and Slimstock.”
The business case
How did Eriks come to the use of an e-procurement solution? From the business case that Tradecloud made at the request of ERIKS, it became clear that substantial annual savings could be made in operational purchasing costs. The savings can be traced back to three things:
- automating operational purchasing
- higher reliability
- better communication
ERIKS existing SAP ERP system is used to place the purchase orders directly into the suppliers software via the Tradecloud portal. Suppliers confirm the orders and there is an automatic processing of the orders in ERIKS ERP system. In this way, operational purchasing is automated. This method immediately provides a better and more up-to-date insight into order patterns and yields more 100 percent accurate confirmations from the suppliers. Employees will spend less time internally discussing and ‘chasing’ incomplete, incorrect or late orders. A large part of the manual work disappears from the process and error reduction increases because there is less chance of typing and interpretation errors. Tradecloud clearly shows which orders and which suppliers have exceptions in quantities, dates or prices. The buyer can then focus his attention. E-mailing or calling is no longer necessary, because in the platform you communicate easily and quickly about an exception. This communication is always in the context of an order or supplier. This prevents individual e-mails to suppliers so that colleagues do not have the same information.