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Integrating four functions into one

Knorr-Bremse, the German-based manufacturer of braking systems for rail and commercial vehicles, has grown and expanded throughout its 112-year history by making a number of acquisitions.


In 2016, the business purchased three very different companies: UK-based, engine air management solutions company GT Group, German technology firm tedrive Steering Systems and the on-highway CVS transmission components business from Bosch in Japan.

 

The functions, staff, suppliers and technology systems of these different businesses had to be seamlessly integrated into Knorr-Bremse. For procurement, this brought with it a series of challenges, including trying to absorb a combined total of 17 purchasing executives and nearly 300 suppliers.

 

In this webinar, Nicolas Thomas, Knorr-Bremse’s global purchasing governance director, talks about how he went about this integration journey and ended up creating a more structured, organised process – successfully reorganising the function to improve performance and agility.

Key takeaways

  • A three-stage integration process was designed and implemented. These three stages included: analysing key information about the acquired companies, bringing the teams and suppliers on board, and, third, aligning tools and processes.
  • The initial analysis focused on understanding the main aspects of the three procurement functions: the teams, including the structure and skills; tools and governance, including key performance indicators (KPIs); and suppliers, including location, contract and quality.
  • To allocate the right people to the right positions, Thomas identified individual skillsets and matched them to where they would best fit within the existing structure of Knorr-Bremse’s procurement team. This team consisted of strategic, project, and plant purchasing as well as supplier quality.
  • Next, the team merged the supply bases by finding common suppliers, allocating new suppliers to the relevant categories, and aligning contractual terms. The team then set about standardising spend management tools and KPIs.
  • It was quickly understood that getting the right processes in place was a priority rather than just migrating individuals and processes from each organisation in one. With these processes in place, the merged team is working in a highly agile fashion.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

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