KROMBERG & SCHUBERT

The Challenge:

MANUAL PROCESSES MAKE IT DIFFICULT FOR KROMBERG & SCHUBERT TO PREPARE FOR SUPPLY CHAIN CHANGES

Kromberg & Schubert has built a legacy of working closely with its customers to develop new, innovative solutions and its success has been made possible, in part, by a hands-on approach to every project. Before implementing QAD SRM, that process also meant using Outlook, Excel and other manual tools to coordinate orders and purchasing, gather information about suppliers and organize data.

“Whenever something was needed, we started an RFQ process by Outlook to gather functional requirements attached as documents. Attachments were given in different ways, including Excel files and PDFs. That would start the hands-on process of bringing everything together and creating a larger picture,” explains Detlef Schmidt, Manager of Central Purchasing Standards, Methods & Controlling at Kromberg & Schubert. 

“The documents were spread out on local and central servers. Nobody ever had an entire overview about all the documents and papers, which were related to tenders,” says Schmidt.

As Kromberg & Schubert’s supplier base and operational footprint grew and diversified, it recognized that its manual workloads and decentralized system were a barrier to progress. It lacked visibility into suppliers, as well its internal operations, and wasn’t able to respond to change quickly. 

Kromberg & Schubert’s supply chain was evolving, and so were its products. Electric and autonomous vehicles need different cables and components than their fuel-based counterparts and Kromberg & Schubert wanted to position itself for success. To do that, the company needed to bring all of its supplier data into a centralized system where it could proactively plan for market changes and disruptive events.

“These things gave us another perspective on how to do things and what needs to be done with everything else having an impact on the industry worldwide, including disruption from the war in Ukraine. The supply chain, market volatility and price increases were impacting all of the other businesses on our table, as well,” notes Schmidt.

“We needed everything to be transparent from the very beginning to the very last,” explains Schmidt. “We also wanted a standardized way of getting back data, prices and offers so we could conduct a harmonized analysis.”

Kromberg & Schubert, and all manufacturers, have good reason to be concerned about supply chain disruption and procurement planning. Research indicates disruption costs the average manufacturer 44% of one year’s profits over 10 years. What’s even more concerning is that 54% of executives acknowledge that they lack clear visibility into their supply chains beyond Tier 1.

Many executives came out of the COVID-19 pandemic with a renewed sense of urgency to safeguard their supply chains against disruption. Ninety-three percent of executives identified supply chain resilience as a top priority, but less than half had made measurable progress toward that goal one year later. 

It’s clear that while most leaders recognize the value of effective supplier management and supply chain resilience, very few know how to achieve it. Kromberg & Schubert recognized that organizing data in a centralized database and finding a way to collaborate with suppliers more effectively was key.

The Solution:

KROMBERG & SCHUBERT CREATES A CENTRALIZED SUPPLIER DATABASE WITH QAD SRM

Kromberg & Schubert began looking for a solution that would help it build a centralized system for managing supplier relationships and the search led to QAD SRM.

“QAD has a lot of locations around the world to support us wherever we are. It also has a big footprint in the automotive industry, so we took a chance to see if that experience would also value us,” says Schmidt. 

Kromberg & Schubert implemented QAD SRM and went live with QAD Supplier Data Management and Sourcing in just six months. 

“We started with QAD Sourcing and Supplier Data Management for supplier management and the next step is continually looking at how to make more things organized and digitized in communicating with and connecting to suppliers,” notes Schmidt.

“The automotive industry is driven by certificates for quality standards and quality insurance documents. This creates the need to have a platform where you can share documents and information, as well as set up workflow processes.”

Kromberg & Schubert found just such a solution, and so much more, in QAD SRM.

The Benefits:

KROMBERG & SCHUBERT ACHIEVES END-TO-END VISIBILITY AND EFFECTIVE SUPPLIER COMMUNICATION WITH QAD

“With QAD SRM, we have gained transparency of our sourcing activities from the very beginning till the very end. From the setup and the planning of an event to execution and nomination at the end,” comments Schmidt. 

“It gives us reliable numbers for planning and shows us what we have to have. QAD SRM also gives us, from a centralized point of view, more opportunities to step into the things that are driven and managed by the local plants.”

Kromberg & Schubert started more than 400 events during its first six months with QAD SRM, with a focus on indirect procurement and plans to expand to direct materials. During that time, Kromberg & Schubert achieved notable cost savings for indirect procurement while dealing with cost inflation and other market headwinds. 

The solution also helped Kromberg & Schubert reduce the number of suppliers in each event, explains Schmidt. Most events now have three suppliers, on average, and the lead time is roughly 35 days from the time the event is set up until final nomination.

“Before implementing QAD SRM, we were very weak in driving our sourcing process and global environment. QAD Supplier Data Management brought all supplier data and related documents and certificates into one single place with the option to integrate into a workflow. That’s one advantage of having a modular system like this,” continues Schmidt. 

The Kromberg & Schubert team has been quick to embrace QAD SRM. “A lot of things have changed in the countries we serve and at the plant level. People there are getting more and more used to QAD SRM and we have separate training, as well as a support program,” says Schmidt. “If you have a complex world like ours, and especially if you’re in the automotive industry, QAD SRM is a good choice.”