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 , top quality and optimum life cycle costs.

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.

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 by drawing on the potential 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 potential new suppliers. 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. This information is fed into the “key figures cockpit”, which provides the key facts and figures of a supplier and can be used as part of the supplier management system in order to prepare for negotiations and annual discussions.

In 2020, equipment and energy accounted for 35.7 % of the Group’s managed purchasing volume, while information technology (IT) accounted for 14.3 %, construction for 28.6 %, MRO (maintenance, repairs and operations) for 13.0 %, and other indirect services for 8.4 %. The total managed purchasing volume amounted to approximately € 197 million.

The extensive reorganisation of the department initiated in 2018 and the continuation of the process, into which the department’s employees are closely integrated, revealed the need for adjustments in the product group portfolio. A comprehensive project for the revision of the existing product groups was launched midway through the year. As a result, there will be three main product groups in future for which the distribution of purchasing volumes is disclosed: technical purchasing (generally comprising the previous equipment & energy and MRO groups), construction purchasing, information technology (IT) and indirect purchasing. Similar to the previous main product groups, the managed purchasing volume in 2020 was therefore divided as follows: technical purchasing 48.8 %, construction 28.7 %, IT and indirect purchasing 22.5 %.

We are continuing to drive the automation of purchasing processes for day-to-day requirements. In the reporting period, 48.1 % of all purchasing processes were handled fully automatically by means of the systems (previous year: 32.9 %). This enables us to streamline processes and ensure both non-bureaucratic procedures and compliance with process standards. By systematically continuing these optimisation and automation measures, further automation potential is expected for the 2021 financial year. Among other things, this potential is to be achieved by replacing the current e-procurement system with a more modern tool.

In the field of process automation, a fuel supply project initiated in 2019 was successfully completed. Processes, purchasing volumes and supplier structures across all companies were carefully analysed and restructured. The procurement process was switched over to a VMI (vendor-managed inventory) concept, which means that the supplier bears the responsibility for inventory and coordinates supplies independently. In addition to lowering procurement costs, the revision of these processes has streamlined and automated the system, resulting in lower process costs.

After mainly focusing on optimising the key procurement topics in 2019 and 2020, the purchasing department will concentrate again on strategic alignment and modelling the entire process chain in 2021. The emphasis will be on product group and supplier management. In terms of processes, the main focus will be on restructuring the procurement of capital goods, as well as procuring indirect goods and services.

Value added

Production value – intermediate inputs (cost of materials, depreciation and amortisation, and other operating expenses); the value added generated is shared between the HHLA Group’s stakeholders, such as employees, shareholders, lenders and the local community.