With Supplier Summit and Center of Excellence to Sustainable Success
Interview with Sascha Kramer, Manager at Kloepfel Consulting
Sascha, can you briefly introduce the client?
It is an internationally leading manufacturer of household appliances, currently undergoing a major transformation. Within this framework, margins, procurement processes, logistics, and the synergies between departments were to be improved in order to increase overall competitiveness.
Why did the client choose to work with Kloepfel?
We were selected through a pitch. What was decisive was our negotiation and data expertise, as well as Kloepfel Engineering – our specialists in product cost optimization. The client urgently needed to reduce costs, and external consultants bring not only expertise but also the necessary pressure into the project – exactly what was critical.
What were the project goals and which topics did you address?
On one hand, we focused on indirect costs such as trade shows, fleet, IT, marketing, and packaging. However, the main focus was clearly on logistics and direct materials. In total, we examined over 400 existing items and additional new products that were in the market introduction phase. In preparation, the Kloepfel Engineering team disassembled the devices into their components, analyzed the production methods and processes involved, and developed optimization proposals – for example, in material selection, material mix, or adjustment of assemblies to reduce manual assembly work. These proposals were then discussed with the quality management team and suppliers to secure further downstream potential.
How did the Supplier Summit proceed?
In November, immediately after the project start, we began preparations. First, we updated the datasets from the analysis phase, incorporated forecast figures for the coming fiscal year to avoid unrealistic assumptions, and organized workshops for negotiation preparation. This took a total of four months, allowing the Supplier Summit to take place in December in China, with us returning to Düsseldorf in time for the traditional festivities. On Friday afternoon, the main event started in Shenzhen, followed by a joint dinner with over 100 invited participants. On Saturday, strategy meetings with suppliers took place, and Sunday was used for further alignment with the client and post-processing of the previous days, alongside sightseeing activities. Monday and Tuesday featured additional strategy and supplier discussions. Parallel to this, we set up reporting for the event and discussed lessons learned and general feedback directly with the CTO on-site. The full follow-up, including additional meetings, evaluation of offers, and implementation of the consequences matrix, continued until May, so that the first results became visible for the client in the P&L from June onwards.
How did the supplier discussions go?
We took a consequence-based approach in bilateral discussions, developed together with the client. The bonus-malus system and the resulting negotiation flow often lead to challenging situations in China due to cultural factors. However, the local purchasers implemented this very well, using the consistent firmness to mutual advantage without anyone later undermining it behind the scenes.
It was also important that the client clearly communicated its growth vision: not only management but also marketing, quality, and product management presented the strategic direction. Therefore, these were not simple negotiations but clear strategic discussions with a defined growth outlook.
What were the biggest challenges?
Intercontinental coordination and organizing the Summit in China with over 100 supplier representatives was demanding. Cultural differences also played a role – our bonus-malus system had to be explained first. Internal bottlenecks at the client, such as limited staff in product management, made it even more challenging.
The client has set up a Center of Excellence in China – what is its role?
The Center of Excellence is a central organizational unit where the client consolidates expertise and responsibility. In Shenzhen, this team handles strategic procurement, tenders, and supplier management on-site – closer to the markets and suppliers rather than from the headquarters in Germany. In addition, supplier qualification and pre-qualification are managed from Shenzhen.
How satisfied was the client with the results?
Very satisfied. The original target was exceeded by €500,000. In logistics, we saved nearly 12%, and the Supplier Summit itself achieved around 4.4% savings. Additionally, the Supplier Summit helped establish a sustainable structure for strategic procurement and supplier management.
How involved is procurement in product development?
Procurement was previously involved too late in product development – usually only after departments had already selected a product. This is set to change. Through early competitive sourcing, procurement, marketing, and quality can compare products together, evaluate margin and market potential, and ultimately select the most economically advantageous item. This gives the client a better negotiation position and allows optimal selection of products based on purchase price, selling price, and quality before the market launch. Procurement becomes more flexible in product and supplier selection and can optimize margins.
How did you involve the client’s employees?
The client’s management communicated clearly and transparently from the start, requesting support from every employee for the overall transformation. All employees voluntarily committed. Through joint preparation, everyone aligned and participated.
And how did the suppliers respond?
Very positively. Management introduced us transparently as external partners. Together with the clear growth vision, it was immediately clear that this was serious. This clear vision and the consequence-based negotiation approach, offering each supplier growth opportunities, convinced the suppliers overall.
How was the collaboration with the client’s employees?
Very good. There was always open and fair exchange. Of course, there were discussions, for example during the Supplier Awards, but constructive solutions were found. Personally, the collaboration was excellent – in Shenzhen, we spent evenings together and got along well.
What is the conclusion?
It shows in all projects that professional preparation and a clear storyline are crucial for the success of a Supplier Summit. We learned that Supplier Awards – despite initial doubts – can have very positive effects. They motivate suppliers and can even strengthen one’s negotiation position. The key takeaway for the client is that procurement must be involved earlier in product development. The Center of Excellence in China has created a structure that elevates procurement to a new long-term level.
Kloepfel Magazin Editorial:
Christian Fischer, Head of Kloepfel Magazin | Tel: +49-152-227-227-50
Email: c.fischer@kloepfel-services.com
Contact:
KLOEPFEL by EPSA
Damir Berberovic
Tel.: 0211 941 984 33 | Mail: rendite@kloepfel-consulting.com