17 October 2005 | Amon Cohen
Siemens UK has cut more than £1 million from its supply bills in 18 months after changing the way it works with suppliers.
The savings follow the electronics company encouraging suppliers to help it come up with money-saving ideas during the lifetime of a contract, and not just in the pre-contract tender stage.
In addition to the cuts realised, Siemens estimates a further £3 million of savings will emerge through its supplier-aided economic value add programme (Saeva).
These findings put the firm on course to achieve its target of between £3 million and £5 million worth of savings over three years.
Successful examples include a proposal from BOC to build a bunker for its gases to help reduce the number of deliveries. Along with other suggestions made by BOC, this has saved Siemens £50,000. Other suppliers have suggested changing product types or parts.
Dietmar Harteveld, Siemens UK director of procurement and logistics, said: "You get ideas from potential suppliers during the request for proposal process but it is only when you start working together that they can really see what is needed.
"My experience is that there is an awful lot of knowledge out there but if you don't create a mechanism for it, it can get lost.
"Saeva is giving us a chance to log, capture, analyse and implement the ideas."
Siemens Corporate Shared Services in the UK devised the Saeva programme and it is now being assessed for rollout in other countries.
The company's awards dinner in Worcester next month will recognise suppliers whose ideas have led to the greatest savings within the business. See Focus