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7 November 2013 | Will Green in Amsterdam
The CPO of energy company RWE is aiming to automate and outsource more than 90 per cent of procurement.
Ulrich Piepel, managing director and CPO of the German energy firm, which owns Npower in the UK, told the ProcureCon Europe conference in Amsterdam yesterday that already 80 per cent of purchases were “non touch orders”, carried out through e-auctions, catalogues and e-tenders, with some buying outsourced.
In 2012 there was a group procurement spend of â‚¬9 billion (£7.5 billion) involving 800 buyers on more than 40 sites, working in a “centre-led category management organisation”.
Piepel said the vast bulk of orders were done through catalogues “so procurement has nothing to do with it”, and 60 per cent of invoices were paid by “self-billing”, cutting out the need to send and process invoices. He added the use of manual processes had been cut from 50 per cent of workload to 25 per cent, with automation accounting for 75 per cent.
As a result the productivity of buyers, in terms of the amount of spend they control, has more than doubled.
“You have to change the level of strategic procurement and push down the transactional,” he told delegates. “The buyers are not working putting Excel figures together – it’s all done automatically.”
Afterwards Piepel said it had taken 10 years to get to this point after he launched the change programme when he joined the firm in 2003. He said he wanted to automate or outsource more than 90 per cent of procurement, so buyers could concentrate on strategic sourcing and “we really focus on value contribution”.