Purchasing and materials management

Purchasing is a shared service provided by the HHLA Group’s management holding company in Hamburg. HHLA Group purchasing supports corporate strategy by means of its professional management of procurement activities. The aim is to establish a consolidated supplier base that is characterised by maximum value added, top quality and optimum life cycle costs.

The strategic purchasing function supports and advises Group companies as part of its holistic management of product groups, suppliers and contracts so that the service and performance requirements of internal customers are met as completely as possible. Market developments relating to new technologies, innovations and the service performance of specific suppliers are considered in close cooperation with the operations and technology departments. In this regard, the purchasing department ensures that all Group requirements for the procurement processes are observed in accordance with the framework guidelines. These guidelines are binding for all employees.

In order to develop viable future solutions for port infrastructure, HHLA remains committed to its strategic and collaborative partnerships with selected suppliers while taking into account both economic and ecological aspects. Products, facilities and processes are systematically enhanced in order to increase the degree of digitalisation. When selecting partners, great importance is attached to reliability, quality, innovative strength, cost structure, economic stability, sustainability and compliance. Compliance with these criteria is monitored by an IT-based supplier management system. All suppliers undergo this process, especially when new potential suppliers are added. This also facilitates a continuous internal assessment. Strategic suppliers are evaluated annually by their internal customers and departments. The evaluations include experience on first contact as well as information about project procurement and processes.

We are continuing to drive the automation of purchasing processes for day-to-day requirements. In the reporting period, 25.2 % of all purchasing processes were handled fully automatically by means of e-procurement systems (previous year: 15.5 %). This enables us to streamline processes and ensure both non-bureaucratic procedures and compliance with process standards. The systematic continuation of optimisation and automation measures gives us the potential to increase the efficiency of, or fully automate, a further 14.7 % of managed processes in 2019. These steps will enable us to drive the further strategic alignment of our purchasing activities.

HHLA’s supply chains comprise capital goods (such as port handling equipment) as well as consumables and other services (such as maintenance). The overwhelming majority of suppliers are from Germany and other European countries. In 2018, equipment and energy accounted for 51.0 % of the Group-wide procurement volume, while information technology (IT) accounted for 21.5 %, construction for 18.0 % and MRO (maintenance, repairs and operations) for 9.5 %. The total managed purchasing volume amounted to approximately € 294 million.

A major project in 2018 was the review of existing structures, processes and procurement systems within the purchasing department with the support of an external partner. By forming project groups, purchasing employees were closely involved in this process and helped define the requirements for HHLA’s purchasing organisation in the areas of digitalisation, training concepts, KPI systems and catalogue management. In this way, the groups were able to harness existing knowledge and experience as fully as possible. The initial results of this work have already been implemented and have led, for example, to a strengthening of personal responsibility.

On the basis of these findings, we will continue to optimise processes and expenditure. Purchasing initiatives with a wide range of objectives have already been defined. Corporate departments will be involved even more closely in procurement processes in future, and cooperation between internal customers will be further intensified. The aim is to optimise procurement costs, to boost efficiency by streamlining the management of product groups and contracts, and to review and harmonise the IT systems used. The aim of harmonisation is to establish an integrated process – from initial need to the point of payment (P2P - purchase-to-pay).

Moreover, purchasing also makes a contribution to the Group’s ongoing internationalisation by supporting foreign affiliates with specific services. Among other things, the department’s objectives are to harmonise structures, exploit economies of scope, and offer the widespread use of available IT systems. From a purchasing standpoint, it is particularly important to strengthen the market position of individual companies.