DMG MORI wins BME Innovation Award 2019

The Bielefeld industrial company has realigned its purchasing strategy. At the same time, a focus was placed on reducing material costs – convincing arguments for the jury. The Innovation Award was presented during the opening plenary at the 54th BME-Symposium Purchasing and Logistics.

The Association for Supply Chain Management, Procurement and Logistics e.V. (BME) has awarded the DMG MORI AKTIENGESELLSCHAFT with the BME Innovation Prize 2019. The award ceremony took place on Wednesday (13 November) during the opening plenary session of the 54th BME Symposium Purchasing and Logistics in Berlin. Under the event motto "#pacesetter", around 1,800 participants of the largest congress for purchasing, logistics and supply chain management in Europe will be discussing current and future procurement strategies until Friday (15 November).

According to DMG MORI, it is a globally active manufacturer of machine tools and provider of integrated technology solutions with annual sales of over 2.6 billion euros and around 7,500 employees. Together with DMG MORI COMPANY LIMITED, the group achieves an annual turnover of more than 3.8 billion euros as "Global One Company". The Bielefeld-based industrial company receives this year's BME Innovation Award for the successful realignment of its purchasing strategy and the associated consistent digital transformation of purchasing.

Changing markets and customer requirements as well as the rapid development of new technologies also present DMG MORI with new challenges. All corporate divisions are affected by the digitization and automation of business processes. This applies in particular to the purchasing organization, which, with a 56 percent share of the total costs of the value chain, acts as an important link between suppliers and internal users.

The realignment of the purchasing strategy should lead to an even stronger concentration on deepened system partnerships. At the same time, DMG MORI is focusing on reducing material costs. The task of purchasing is to make its own contribution to increasing corporate profitability with the help of new levers.

Operative purchasing has relied on the use of electronic procurement solutions for years. However, the “Digital Purchasing” project for the future goes far beyond the functionalities known and used to date. While, for example, existing IT solutions are limited in terms of computing power, degree of networking or logic, the new digital systems will be able to evaluate any number of historical and future-oriented data in the future. In this way, they will help to advance the holistic and autonomous real-time completion of purchasing tasks.

The use of digital solutions will improve the company's competitive position. The innovative power of DMG MORI will also be strengthened. Above all, however, their buyers will have greater design options in the future. Modern technologies will give them new opportunities to optimize all links in the value and supply chain.

Over the past two years, DMG MORI has already achieved clear results in the realignment of its purchasing strategy. This includes, for example, the Group-wide standardization and simplification of all purchasing processes. The digitization of operational processes also creates scope for new strategic tasks in purchasing. DMG MORI has also recorded a significant increase in efficiency and significant cost optimization. Within five years of realigning and implementing all digital transformation measures, the company expects net savings potential in the double-digit million euro range.

Both the integrated use of modern management methods for the conceptual development of a purchasing strategy and the implementation of the transformation in purchasing at DMG MORI can in principle be transferred to other companies in a wide variety of industries. For example, the IT systems invested are all cloud-based.

Timo Rickermann, Chief Purchasing Officer of DMG MORI AKTIENGESELLSCHAFT: “The award-winning concept convinces with more efficient processes through automated ordering processes, a global matrix organization with regional purchasing units and integrated IT solutions. Networking encompasses the entire value chain. The focus is on Internet-enabled products and data-based services. In order to establish a completely automated procurement process, DMG MORI has also integrated central financial accounting. In this way, the entire process - from the purchase requisition to the payment of the invoice - can be digitally mapped. Demand forecasts can also be carried out better and cooperation with suppliers can be made even more efficient. All these measures help to sustainably increase the contribution of purchasing to the success of the company.”

Dr. Michael Nießen, Deputy Chairman of the Federal Executive Board and Speaker of the BME Jury: “DMG MORI's Purchasing Department has successfully reacted to the changed and increased customer requirements in the AG. The company has thus shown itself to be a true #Pacesetter. For the realignment of the purchasing strategy, a structured change management has been set up and a culture of positive change has been established which is supported by all employees. With consistent automation in all areas for which purchasing is responsible, combined with greater scope for design, such as supply chain optimization, digital transformation has not only been initiated, but has already been implemented to the greatest possible extent. Close cooperation with system partners ensures that innovations continue to be carried into the company and jointly developed. All this not only leads to a consistently positive response for the company, but is also the basis for anchoring the role of purchasing in the company. The comprehensive and multi-faceted transformation concept convinced the BME jury to award the BME Innovation Prize 2019 to DMG Mori AG".

About the BME Innovation Award:

The BME Innovation Prize is awarded by the German Association for Supply Chain Management, Procurement and Logistics (Bundesverband Materialwirtschaft, Einkauf und Logistik e.V., BME) since 1986 for successful, innovative purchasing, supply chain and logistics management. In October 2019, the jury nominated Burda Procurement GmbH, DMG MORI, innogy SE and Schweizerische Bundesbahnen SBB AG from among the applying companies submitting the concept for the second round. Thanks to its convincing concept, DMG MORI AG emerged as the winner in the final round. The winner is traditionally presented to the public at the BME Symposium Purchasing and Logistics in Berlin. Impressions from the 54. Symposium on Purchasing and Logistics