Cutting costs through teamwork

The DMK Group kicked off its ambitious #pacesetter program at the start of the year, putting numerous supply relationships and service contracts out to tender, negotiating, optimizing and designing them afresh, aiming for purchasing departments to save a double-digit million sum. DMK used the knowledge and networks of everyone involved: “Pacesetter is a company-wide project supported by many specialist areas,” says Heike Fastenau-Gross, project manager and Director of Corporate Procurement at DMK. All the measures were agreed with the buyers and carried out together, which was not always easy amid the pandemic.

Regular contact was impossible during the pandemic, so everything went online. Digital Supplier Days were held, with a video conference bringing together many suppliers in direct competition for the first time. “Usually in purchasing, you see and get a sense of the suppliers, you sit down together with them,” says Heike Fastenau-Gross. “Nevertheless, despite the health measures imposed due to the crisis, we achieved the desired savings."

Purchasing was bundled across the group to a large extent in the #pacesetter program and a range of profitability strategies deployed, including standardization. “We use lots of materials with different properties, and realized we didn’t need such a high number,” says Heike Fastenau-Gross. “We see we can spend much less by purchasing fewer different formats and reducing the diversity of our materials.” The #pacesetter program also optimized batch size to cut costs. Even when ordering, teams target the optimal batch size in order to obtain a discount for quantity. “Despite all the cost pressure, though, the company still sought to work as a partner together with suppliers and service providers,” says Heike Fastenau-Gross. “Ultimately, everyone in a supply chain depends on everyone else – as we saw in the first wave of the pandemic.”

The numbers speak for themselves: #pacesetter has saved the company a total of 15.3 million euros in costs in 2020. Savings of more than 35 million euros are expected through 2022. Heike Fastenau-Gross says DMK’s specialist departments need to provide the infor-mation and resources needed in order for these measures to be implemented. “Otherwise, it won’t be possible to make all the savings.” The same applies to #pacesetter as throughout DMK: Only by working together can we make the changes needed to fit the company for the future.