Reams and Reams of Paper Saved

HKM now handles its steel orders electronically. (Image: ThyssenKrupp)
HKM now handles its steel orders electronically. (Image: ThyssenKrupp)

“A paperless workplace is a happy workplace,” declares Marc Klinger, who is responsible for basic strategic issues in materials management at Hüttenwerke Krupp Mannesmann GmbH (HKM) in Duisburg, Germany. The purchasing documentation solution nextPCM Procurement Management – which is based on SAP NetWeaver Folders Management (formerly SAP Records Management) – is now enabling this steel company to manage all of its purchasing documents and processes electronically from a central location.

In particular, the solution from nextevolution AG has brought a measure of automation to HKM’s complex procurement processes. The company’s managers can now make faster decisions because all those involved in these procedures have constant access to the same information.

The purchasing volume of HKM – a subsidiary of ThyssenKrupp Steel AG, Salzgitter Mannesmann GmbH, and Vallourec & Mannesmann Tubes S.A.S. – is considerable: In procuring services, production facilities, and material, its 21 purchasing employees place over 15,000 individual orders and request around 30,000 releases based on outline agreements (plus another 30,000 release orders from electronic catalogs) every year. One-third of these orders and releases pertain to materials, with the rest involving services and facilities.

HKM works with just under 2,500 vendors; its purchasing volume in 2007 came to nearly €300 million (approx. U.S.$388 million). Its procurement processes are extremely heterogeneous, spanning from fully automated workflows that take just a few days to highly complex operations that require several years.

While HKM’s orders have run through SAP’s Materials Management (MM) component for some time, the company was not long ago still managing most of its procurement documents in paper form. Before it implemented its new file solution, HKM’s high order volume was regularly producing an entire wall of shelves packed with contracts, order confirmations, invoices, proof of services rendered, and other correspondence on each processed order every single year. Regardless of how each document was received – e-mail, snail mail, fax – the company’s go-to archiving format was paper.

The documents were distributed across various departments – purchasing, invoice verification, technology – over almost a square mile at HKM’s plant on the Rhine River. Each department had its own sorting system , which made it increasingly difficult to maintain an overview of the company’s complex procurement procedures and required more administrative effort. In addition, this paper-based archiving method was too insecure due to insufficient access control and the high risk of documents going missing. The large number of procedures in HKM’s approval processes also led to a lack of transparency and efficiency.
Read On: Centralized digital storage of all purchasing documents

Centralized digital storage of all purchasing documents

HKM thus opted to augment its existing environment based around SAP’s MM component with the digital application SAP NetWeaver Folders Management. It wanted every part of its future filing solution to run in SAP, where its purchasing employees felt at home and would be able to take advantage of integrated processes – constant access to the MM ordering system, for instance. “Our goal was to start storing all of our purchasing documents at a central, digital location and, in particular, add SAP support to the process of resubmitting approval procedures,” says Axel Kiepen, head of materials management at HKM.

HKM could have handled each of these objectives with different systems: If it had only been about approving orders, a workflow tool would have been best suited to storing documents in a digital archive. However, HKM was sure that SAP NetWeaver Folders Management was the ideal means of covering all of its requirements with a single solution fully integrated into SAP.

In determining the design and configuration of its new purchasing documentation solution, HKM selected nextevolution AG, a specialist in SAP NetWeaver Folders Management. “The solution from nextevolution is based entirely on SAP NetWeaver Folders Management and SAP’s workflow for managing and monitoring time- and content-based processes,” Klinger explains. “Plus, nextevolution was the only provider able to present successful reference projects when we were making our decision.”

Since implementing the solution, Klinger has been making sure that his area no longer produces paper. “With nextevolution’s purchasing documentation solution, we’re able not only to manage all of the information we used to keep on paper, but take advantage of even greater opportunities, as well – particularly with regard to workflow and approval processes,” he adds.