How the experienced interim manager Torsten Althaus built up a strong global team with the support of the management and optimized processes in order to sustainably increase efficiency and liquidity
What was the initial situation?
H2Stamping (formerly Härter) is a stamping and plastic composite technology company. The company was acquired in February 2023 by a fund advised by Orlando (private equity).
H2Stamping had a bottleneck in purchasing due to staff turnover and brought me on board as interim purchasing manager within a few days and gave me the following priorities: elimination of advance payments to suppliers and optimization of payment terms, inventory reduction, savings concept and its implementation, management and development of a professional international purchasing department. H2Stamping has plants in China, the USA and Poland in addition to the main plant in Germany. It was also my job to rebuild and restructure the purchasing team, as there were considerable personnel changes as a result of the restructuring.
Then a lot of factual issues had to be dealt with. For example, my aim was to reduce inventories, particularly metal inventories, as they had tied up a lot of liquidity. There was also room for improvement in terms of collaboration with internal departments, such as Supply Chain Management and Production. In addition, there were many manual processes that needed to be digitized or automated. Another issue was that many suppliers charged in advance before they delivered. And last but not least, we needed to save money in direct and indirect purchasing.
What has been achieved with suppliers?
First of all, we were able to switch most suppliers from prepayment to our regular payment terms. To do this, we wrote to all suppliers with a form letter. In order to obtain the necessary credit limits, we worked closely with the financial accounting department, the suppliers and their trade credit insurers. We then updated the terms and conditions of purchase, which enabled us to optimize processes and improve our legal security. Through many discussions and visits, we have also succeeded in significantly improving our cooperation with suppliers and establishing a relationship based on trust.
Quality assurance is important in supplier management. We already had a long-standing employee with very good procedures and tools who implemented the topic very well and with whom we were able to achieve first-class results, for example with regard to supplier complaints, customer audits and certifications.
How did you build a strong international purchasing team and improve cooperation with the locations and internal departments?
In order to strengthen the highly motivated international purchasing team, I worked very closely with the young employees and our plants in Poland and the USA. This was a prerequisite for strengthening international cooperation in order to exploit synergies within the Group.
We also used regular communication to better integrate purchasing with internal departments such as supply chain management and production.
To what extent have you optimized working methods in Purchasing?
We have automated manual processes and approval procedures via the IT systems. Of course, the project provided employees with a lot of knowledge and the use of new tools, such as effective supplier management or the professional evaluation of offers. This enabled us to standardize and simplify many things. For example, there were supplier lists with preferred suppliers for certain product groups, which are always requested when we receive new inquiries.
How did you free up liquidity?
By drastically reducing metal stocks and introducing consignment warehouses, we were able to free up a large amount of liquidity. Especially in areas such as steel, aluminum and copper, I knew many suppliers, which was a great benefit for H2Stamping. I also installed a professional metal hedging system for listed metals, including reporting. The inventory reports were submitted monthly to the relevant interfaces and the CFO.
In addition, we worked with a liquidity planner in charge to create a liquidity plan with all incoming and outgoing payments and checked what we really needed and when. In other words, we constantly examined where expenditure could be reduced. We coordinated closely with production and supply chain management and presented the plan to our CFO once a week.
Then there were the savings.
This is not easy in the automotive sector, as many suppliers have already been negotiated and approved or set by the customers. I drew up a data-based list of potential savings and coordinated this internally with the C-level. We had a particularly high effect with a “monopoly” supplier for a really high-quality part, where we were able to find an alternative supplier after a lot of coordination with the customer.
What role did the optimization of the data situation play?
The data situation is an issue in many companies and it is worth putting it in order with diligence in order to make purchasing more transparent and efficient in the long term. For example, we compiled and updated current information on delivery times, replenishment times, payment terms, graduated prices and supplier master data.
Overview of successes:
1) Expansion and professionalization of the global purchasing team, use of Kloepfel tools and methods
2) Trusting cooperation with the internal interfaces (production, supply chain management, quality, etc.) and with the suppliers
3) Rapid assumption of responsibility for purchasing at the acquired company Hoffmann (annual turnover at the time of acquisition 60 million euros).
4) Realization of considerable savings for H2Stamping and Hoffmann
5) Drastic reduction in metal inventories
6) Professional hedging strategy for listed metals
7) Minimization of prepayment suppliers
8) Optimization of disposal at H2Stamping and Hoffmann
H2Stamping
– Specialist for stamping and plastic composite technology
– Worldwide turnover approx. 200 million euros
– Employees approx. 1,300
– Plants in Germany, Poland, China, USA
Contact:
Kloepfel Group
Damir Berberovic
Tel.: 0211 941 984 33 | Mail: rendite@kloepfel-consulting.com