Siemens purchasing set to achieve ambitious spend control target

14 May 2010
14 May 2010 | Rebecca Ellinor

Purchasing and supply at Siemens made a “substantial contribution to earnings in 2009” and the department is confident it will reach a target of controlling €17 billion (£14.6 billion) of spend in company-wide managed procurement by September.

In a Q&A with SM to be published next month, Barbara Kux, head of supply chain management and chief sustainability officer, gave an update on her department’s work.

Kux – the first female board member in the industrial giant’s 161-year history – said: “We’re making solid progress with our supply chain management organisation.” She joined from Philips in November 2008.

“We’ve now bundled a large share of our purchasing volume – a total of 44 per cent – across our sectors (industry, energy and healthcare). We’re in the process of consolidating and strengthening our supplier base, and, as a ‘global local player’ [it buys locally] we intend to expand our share of global value sourcing from about 20 per cent in 2008 to more than 25 per cent in the medium term.” She explained 'global value sourcing' means the company works not only to buy in emerging countries but also produce, design, develop and sell.

She went on: “These measures, and of course others relating to our ‘classic’ procurement activities, are making decisive contributions to value creation at our company.”

She said the €17 billion target for Siemens-wide managed procurement volume is set for the current fiscal year, which ends in September, so her department still has a few months left. She added: “When you look at the figures for 2009, you can see that we’ve already come a long way: In 2009 alone, we increased our company-wide managed procurement volume from €12 billion to €16 billion. So we’re very confident we’ll reach this target.”

* The full article will appear in the 10 June issue of SM.

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