The German Association for Supply Chain Management, Procurement and Logistics (BME) presented Syntegon Technology with the 2021 BME Innovation Award at a special ceremony on 8 November 2021. This was held during the afternoon plenary session of the 56th BME Symposium on Purchasing and Logistics DIGITAL, a three-day online event run under the motto of #newhorizons. At BME's largest networking event, speakers and participants will discuss the future challenges facing purchasing, logistics and supply management and the new tasks these will entail.
Leading provider of processing and packaging technology
Syntegon has positioned itself as a global leader in processing and packaging technology. Formerly the Packaging division of the Bosch Group, the company has been providing end-to-end solutions for the pharmaceutical and food industries for over 50 years. Headquartered in Waiblingen near Stuttgart, Germany, Syntegon has around 6,000 employees at 30 locations in over 15 countries. It generated 1.3 billion euros in sales in 2020. The company's portfolio of intelligent and sustainable technologies comprises standalone machines, systems, and services. It currently employs 260 people in its purchasing department, which handles an annual procurement volume of over 600 million euros. Syntegon was chosen to receive this year's BME Innovation Award in recognition of its purchasing department's successful and innovative transformation.
Comprehensive transformation of purchasing organization
The starting point for Syntegon's comprehensive transformation of its purchasing organization was the sale of Bosch Packaging Technology (now Syntegon) to CVC Capital Partners at the beginning of 2020. The changes were designed to improve liquidity and push down materials costs and create a purchasing organization that is better adapted to the company's new and more flexible structure.
As part of the new organizational set-up, the company now takes a centralized approach to manage strategic sourcing, project procurement and supplier development. The locations are still responsible for conducting their operational procurement, and Syntegon has established a framework of uniform processes and IT solutions for all locations designed to assist them in this task.
When it came to transforming its purchasing operations, Syntegon took an innovative approach that eliminated the need for in-depth discussions on how the organizational structure might look in the future. Instead, the company put its chosen operating model of a centrally managed purchasing strategy into practice on a trial basis from day one with the support of the management consultancy firm Inverto. This enabled Syntegon to improve liquidity and procurement results right from the start of the project phase. Questions regarding the new organizational structure, which was critically important to many stakeholders, were only answered by the project managers once tangible results were available to everyone.
EBITDA as a most important procurement performance indicator
Syntegon also focused on the contribution of procurement spend to EBITDA as the most important procurement performance indicator (EBITDA = earnings before interest, taxes, depreciation of property, plant, equipment, and amortization of intangible assets). This significantly improved cooperation between the locations and central purchasing. The introduction of new digital tools provided further support for the reorganization of the department.
By transforming its purchasing department, Syntegon has increased liquidity and significantly reduced its materials costs within a very short timeframe. Purchasing now makes a tangible contribution to increasing the company's value, which has improved the purchasing organization's image both inside and outside the company. The successful transformation of its purchasing department will help Syntegon deal with current uncertainties in global procurement markets and tackle the difficulties caused by the coronavirus pandemic.
Gundula Ullah, chairwoman of the BME board and member of the jury, was impressed by the results: "The cleverly managed transformation by Syntegon Technology GmbH's purchasing department has enabled this division to contribute significant value to the company during a difficult phase in the procurement markets. The BME jury chose to present Syntegon with the 2021 BME Innovation Award in recognition of its comprehensive and multifaceted transformation concept."
Berthold Kraus, chief purchase officer at Syntegon Technology, was delighted to receive the award: "We appreciate this recognition and are proud that the BME has chosen to reward our hard work over the past 18 months with the Innovation Award. I would like to thank all my colleagues and the team at Inverto that helped us meet our goals. When Syntegon left the Bosch Group, it said that it would become even more flexible and efficient, and that is exactly what the transformation of our purchasing department has achieved. This marks another step forward in Syntegon's efforts to raise its profile as a leader among process and packaging companies."