MAHLE centralises
the Purchasing
Contract Management

Global corporation optimises purchasing with digital contract management

MAHLE is a leading international development partner and supplier for the automotive industry. More than 72,000 employees develop and produce at around 160 locations on five continents. The large order volumes that the procurement department awards to suppliers generate purchasing power. MAHLE further expanded this strategic advantage with centralised contract management. The digitalisation partner for the challenging project: otris software AG.

Global corporation optimises purchasing with digital contract management

The MAHLE Group is divided into various business units and profit centres. The Group organises procurement via a central purchasing department and additionally via decentralised purchasing departments, which are maintained by each business unit and profit centre. The decentralised organisation has advantages: lean administrative structures are efficient and knowledge of local conditions is a profitable factor in an internationally operating company. At the same time, a decentralised organisation can lead to information that is relevant for an optimal negotiation result not being available centrally.

Providing transparency
Before the introduction of the central contract management platform, the individual purchasing departments of the MAHLE subsidiaries managed their contract portfolio locally. Negotiated prices, delivery or payment terms were only available to the other MAHLE companies by actively sharing the documents.

The consequence: It was not impossible for a MAHLE company to negotiate delivery terms with a supplier without knowing that another MAHLE company was already a customer. However, in order to negotiate optimal conditions, it is helpful if buyers are informed about existing contractual relationships as well as existing contract contents. On the one hand, this information prevents renegotiations that could result in less favourable conditions. On the other hand, there are no blind payments if an existing contract content is to be taken over instead of a renegotiation.

In order to provide the purchasing departments at all locations with an optimal information basis, MAHLE decided to tackle a comprehensive project: A central contract management software was to generate transparency across the entire group of contracts relevant to purchasing.

„Users like the structure and clear layout of the software.“

Carsten Möbus
Leiter Supply Chain Collaboration und Prozessexzellenz bei MAHLE

Making information useful.
The aim of the project was to leverage the economic potential inherent in restructuring contract management. After specifying the requirements for the system and an extensive search for suppliers, MAHLE opted for the contract management software otris contract. A decisive factor in the decision was not least the adaptability of the system. Many individual adaptations were necessary simply because of the size and diversity of the group.

Implementing customisations.
An extensive configuration that otris consulting implemented was the expansion of the search and sorting functions: The system now automatically generates additional criteria when a contract is created, which help the user with the search. Example: A new supply contract for a certain product group is created in the system. The contract partner is the main plant in Stuttgart. The contract is then found under the superordinate regional designation (i.e. Germany or Europe) as well as under the superordinate product category. The special search functions make it easy for the user to conduct an exact search for all existing contracts that could be relevant for an upcoming purchasing negotiation. An additional full-text indexing function enables the user to conduct an uncomplicated search for freely selectable keywords, which the system matches not only with the metadata, but also with all document contents.

Regulating access
The size of the group as well as the diverse system landscape with several data centres in different countries required special attention when implementing the authorisation concept. Global, web-based access to the solution but also protection against unauthorised access and strong data protection were main requirements for the system. Another requirement that the otris consultants implemented: Not only access but also the scope of authorisation is granted depending on the user group. For example, only a user in a certain position (e.g. lead buyer) in a certain region (e.g. Asia) has the right to edit a certain contract file and users in other regions have read-only access.

The contract management software otris contract is available in all MAHLE purchasing departments worldwide. Around 1,000 employees use the system to maintain the contract portfolio and to research specific information that supports optimal purchasing negotiations. Following the global roll-out of otris contract in purchasing, the sales department is currently planning to implement the solution for its business unit. “The response has been very positive,” notes Carsten Möbus, Head of Supply Chain Collaboration and Process Excellence at MAHLE. “The users like the structure and the clear layout of the software.” A system characteristic that is of great importance for user acceptance. “Converting MAHLE’s worldwide purchasing contract management to a central system was a challenging task and could not be implemented overnight. Now we are at the point of benefiting from the changeover. The effort was worth it,” Carsten Möbus sums up.

About MAHLE.
The MAHLE Group is a leading international development partner and supplier to the automotive industry. The product portfolio covers all important issues along the powertrain and air-conditioning technology – for powertrains with combustion engines as well as for electromobility. MAHLE products are installed in at least every second vehicle worldwide. MAHLE components and systems are also used off the road – whether in stationary applications, mobile machines, ships, or on the railways.

Picture credits:
The photos used (logo, banner, quote) were kindly provided by MAHLE.