Supply Excellence — Exclusive: Navteq’s Success Story

Exclusive: Navteq’s Success Story

January 23rd, 2007 · by Tim Minahan · No Comments · best practices, events, supply management

Yesterday, Rob Martens, Director of Purchasing EMEA for NAVTEQ, shared techniques his organization used to assess procurement performance and develop a plan for improvement. Today, Rob shares how NAVTEQ organized its turnaround and the results they’ve achieved.

What does NAVTEQ’s new procurement organizational structure look like?
It is a regional center-led structure, supported by worldwide purchasing policies and procedures and a companywide ERP system from PeopleSoft.

What role has and will technology play in your procurement transformation?
Technology played a crucial role. Fortunately the company already used an ERP system but the purchasing module was only used by the distribution group. We have extended the use of the components and rolled out the application to other user groups, such as IS, Marketing and Facilities. Currently we are rolling out a bolt-on e-Procurement application that will enable electronic requisitioning and workflow approvals that will replace paper based requisition. Considering we have over 125 locations worldwide this is a critical success factor.

What were the key metrics you are using to measure your performance?
We are measuring savings, contract compliance, number of requisitions processed and number of orders per supplier. Another major measurement is spend under contract. Our distribution group measures supplier performance.

What have been the results you’ve seen to date from your improvement initiative?

The Purchasing activities are now performed on a much higher, professional level, based on global policies and procedures. The purchasing module of the ERP system is utilized to a much larger extend and by most divisions. All major spend suppliers are operating under written agreements. Supply risks have been mitigated by sourcing backup suppliers. The number suppliers per spend category has reduced and last but not least considerable financial savings have been achieved.

What are the top challenges and lessons learned from this initiative?
Our key challenge, after making these improvements, is to maintain the attention of senior management. It is, quite natural in our dynamic and fast changing business environment, that they are very much focused on revenue growth. Also the strategies and plans for implementation have to be flexible in order to adjust to new circumstances that provide new drives for purchasing improvement. For example the implementation and registration to the ISO/TS 16949 standard increased the need for better supplier selection and performance measurement processes and the Sarbanes/Oxley rules made way for improving the purchasing related approval processes. Different business circumstances can be a challenge but are also an opportunity to reach your long term world class purchasing goals.

Thank you, Rob. And congratulations on your tremendous progress and results. You’ve provided some very useful advice Supply Excellence readers can employ to jumpstart their own supply management initiatives.

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