Procurement expenses, 2007
Volume: €10.3 billion

Purchasing of goods and services

Corporate Procurement purchased goods and services with a total value of about €10.3 billion in the year under review. Spending was higher than in 2006 (€9.5 billion) because of the integration of Williams Lea and other factors. Transport services are generally procured by the individual units, with Procurement providing advice on a project basis.

Procurement organisation streamlined

Procurement is a centralised function. The Group employs sixteen product group managers worldwide who work closely together with regional procurement managers. We have optimised Procurement’s regional structure with effect from 1 December 2007; and the regions now comprise: Germany/Austria/Switzerland, UK/Ireland, Europe/Middle East/Africa, North America, South America and Asia Pacific. Product group managers and regional procurement managers report to the head of Corporate Procurement. This line reporting structure enables us to pool our needs worldwide while satisfying the service and quality requirements of internal customers.

We seek continuously to improve our performance. Our success in 2007 was corroborated by a study produced by the European Business School, which compared the purchasing departments of 35 other companies with our own. In direct comparison, Deutsche Post Procurement ranked amongst the leaders as regards both procurement cost and economies achieved in relation to procurement volume.

As ever, our success depends on the skills and quality of our employees. For this reason, we extended our Fit4 Procurement programme in the year under review to embrace all the regions; we also conducted numerous subject-specific training courses.

Compliance with environmental guidelines

The principal procurement initiatives during the year attached a high priority to environmental aspects of our business. In Germany, for example, electricity supply agreements were concluded primarily with producers using renewable energy resources. From 2008 onwards, more than 60% of the electricity consumed by our headquarters and branches will come from eco-friendly sources. This will enable us to reduce CO₂ emissions by more than 200,000 tonnes a year. Furthermore, purchasing in tranches enables us to pare administrative costs and secure price advantages for the next one to two years. This procedure allows us to take market pricing trends into account since purchasing is done in tranches throughout the year rather than all at once.

In the United Kingdom, the supply of electricity and gas was put out to tender. In the light of this, our Group subsidiary DHL converted its 104 main facilities to renewable energies. The target is to reduce annual CO₂ emissions by 98,000 tonnes. In Asia and Europe, we have reduced the size of the air waybill, thus eliminating 200 tonnes of paper and the associated costs every year.

We also apply environmental criteria to the purchase of vehicles. Our focus here is on fuel consumption and emission class in accordance with the EU classification.

Working together with customers and suppliers

We have stepped up our co-operation with our internal business partners. The First Choice programme was rolled out throughout Procurement. This Group-wide programme, which aims to enhance our customer relationships, has already given rise to several initiatives. It is driving our endeavour to understand and satisfy our partners’ requirements more effectively.

Procurement regularly reviews key suppliers’ service quality with its business partners in order to identify potential weaknesses at an early stage and arrange suitable improvement measures with the suppliers. This has enabled us to substantially raise both the quality of services and our internal customers’ satisfaction.