SCALUE - Procurement 2023 - Trends and Insights by Frank Sundermann

As 2023 draws to a close, it's time to take a closer look at the previous year. In today's expert interview, we take a look at 2023 as experienced by companies.

Frank Sundermann, CEO of the consulting firm Durch Denken Vorne Consult GmbH (DDVC) and a valuable partner of SCALUE GmbH, provides us with insights into the developments that have particularly shaped the year 2023 and shares his personal highlights.

Mr. Sundermann, your company Durch Denken Vorne Consult GmbH specializes in consulting on topics such as procurement, product cost optimization, supply chain, and digitalization.
Could you please tell us what stood out to you in customer conversations in 2023? What three topics were of significant interest to companies?

Primarily, this year, I engaged with clients on the following three topics:

1. Retrieving price demands:

Many raw material prices have decreased compared to 2022. Additionally, companies are once again focusing on cost control compared to last year, where supply chain issues took precedence. Both factors lead companies to approach us on how we can help them retrieve price demands. This involves training the negotiation skills of buyers, systematic preparation for negotiations, and sparring in negotiation simulations.

2. Inventories:

This is still an impact from the previous year, where the goal was to secure as much as possible. Warehouses are full, and storage costs money due to increased interest rates. Therefore, companies come to us seeking support in optimizing their inventory. Importantly, we emphasize a methodology that ensures sustainability through employee involvement.

3. Digitalization:

Here, I want to highlight ChatGPT. We started exploring it early in 2023 and developed training on how ChatGPT can be effectively used in procurement. The demand is currently enormous as everyone wants to know what they can achieve with AI-powered chatbots.

Let's take a closer look at the level of digitalization and data transparency in procurement. What was the key focus that every company was dealing with in 2023?

Data transparency is an ongoing theme in procurement. Companies frequently approach us wanting to enhance their strategic procurement capabilities. An essential tool for this is category management. To make this work, I need data transparency. I can either generate it myself through an in-house spend cube, which is challenging in the era of SAP S4/HANA implementations, or I can turn to solutions like SCALUE, which quickly builds a spend cube from raw data in SAP and makes me operationally effective.

The procurement landscape is becoming more complex, and global events are escalating more frequently. Many procurement managers and strategic buyers often do not know which priorities to set and which to ignore. What role will the introduction of categories and the creation of category strategies play in prioritizing tasks and digitalization?

The introduction and use of categories are essential. Only then can I divide the spend cube into meaningful areas that I can strategically address. It's similar to preparing a large meal without categorizing the ingredients for the appetizer, main course, or dessert. Once the categorization is done, I can also develop targeted category strategies, creating a delicious dish from the assigned ingredients.

This year, we jointly implemented an innovation for category management, introducing the Category Profile 2.0. You've been involved in shaping this topic for years and decided to implement the innovation with SCALUE. What results can procurement managers expect from the new Category Profile 2.0?

To stick with the food analogy, the recipe in the procurement world is the Category Profile, creating the strategy step by step. The result is a clear roadmap of where I want to go with the categories or targeted measures leading to savings or process improvements within the category.
The beauty of it is that the profile is not complicated, almost like using a Thermomix to create a delicious dish.

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We were thrilled to see in January 2023 that the three companies DDVC, EINWERK, and Günzel Consulting are bundling their services through the PROCUREMENT EXCELLENCE GROUP. How has the partnership developed, and what advantages does it bring to customers to work with the PROCUREMENT EXCELLENCE GROUP?

Coming together as the PROCUREMENT EXCELLENCE GROUP (PEG) was the right step for us. This year, we've handled numerous projects together and were able to offer services in the process that Durch Denken Vorne Consult did not have in its repertoire, such as recruiting procurement personnel and supplier audits. The market appreciates the pragmatic approach of our three consulting firms, and I look forward to the collaboration in 2024 with optimism.

Every year has its highs and lows. How did you experience the highs and lows of 2023?

For the highs, I would mention the collaboration mentioned earlier as PEG. Also, the early focus on ChatGPT, which has made us a recognized expert in the field.
As for the lows, it's less related to Durch Denken Vorne Consult directly and more to the warlike conflict between Israel and Hamas and between Russia and Ukraine.

Thank you very much for this insightful review, Mr. Sundermann. We are pleased to inform our readers that there will also be an expert interview with you as an outlook for 2024. Until then.

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Interview December 9th, 2023 Procurement 2023 - Trends and Insights by Frank Sundermann Rubina Hatziparassidis

Interview December 9th, 2023 Procurement 2023 - Trends and Insights by Frank Sundermann

Rubina Hatziparassidis