Procurement

Lower procurement volume

In 2008, the Group centrally purchased goods and services with a total value of €9.0 billion (previous year: €10.3 billion). Currency effects – largely in relation to the US dollar and pound sterling – reduced the purchasing volume as expressed in euros. We also pooled volumes and as a result achieved better terms. The individual units generally continue to procure their own transport services, although Procurement has a greater involvement than previously.

The following examples show how we selectively pooled expenses and thereby achieved better terms and conditions. The acquisition of personal computers was put out to tender globally. As a result, prices fell substantially and, at the same time, performance improved. We entered into a €350 million European co-operation agreement with Telefónica for telecommunications services outside Germany. Thanks to optimised telecommunications, we anticipate savings of more than €150 million over the next five years.

We fitted some 100 warehouses in North America with more efficient lighting. This reduced electricity costs by more than US $ 6 million and improved the lighting and hence the working conditions.

Procurement capabilities expanded

Procurement is a centralised function in the Group. The heads of Global Sourcing and their sixteen product group managers work closely with regional procurement managers and report to the head of Corporate Procurement. This allows us to pool our needs worldwide whilst satisfying the service and quality requirements of internal customers.

In 2007, we began to reorganise Procurement’s regional structure. Strategic procurement and operational order processing are increasingly carried out by regional competence centres.

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