Successful Procurement Transformation
Doka’s Thomas Zsulits and Mirko Loos discuss their company-wide procurement and material group management transformation
Lighthouse Event Doka
Dating back to 1868, Doka has over 150 years of heritage in the construction industry, providing its customers with reliable, experienced and trustworthy services, “listening intently” to understand the world through the eyes of its customers. Describing the company and the services it provides its customers, Thomas Zsulits Director Global Procurement at Doka says, “Doka is a market leader in many countries when it comes to formwork for public, private or commercial customers. We are also on a good way of becoming market leaders in scaffolding. Our most prestigious projects have been the Burj Khalifa in Dubai or the Kingdom Tower in Saudi Arabia. But also in infrastructure projects Doka is seen as the partner of choice for bridges, tunnels or cooling towers.”
How Doka transformed its procurement operations
Doka is operating globally. They formed a global organization 3 years ago and have just undertaken another step to become a more effective and modern organization.
Mirko Loos, Head of Material Group Management at Doka, explains that “before Thomas started at Doka 3 years ago, purchasing departments had only been existent in larger countries or countries with a production operation, like Austria, Slovakia and Germany. Their main focus was on material disposition for production. Global agreements had been existent, but sourcing was mostly done locally or regionally, at max.”
«"Leadership for me is typically the problem and the solution at the same time. The idea should be to work on oneself to reduce the number of mistakes that you typically do"»
Mirko Loos - Head of Material Group Management, Doka
A new procurement structure was introduced in 2018, and it was meant to secure an effective material disposition on the one-hand side, responsible for managing the P2P process and providing support to local stakeholders on day-to-day operational issues. On the other side, a separate team was formed focusing on strategic work which otherwise would remain undone, like developing effective sourcing strategies, or delivering other typical value propositions to the Organization. The operational teams remained in the countries mentioned before. As of 2021, they will become part of support units responsible for operational procurement, invoice control and MDM and covering our regions Middle East/Asia Pacific, Americas and Europe. Our strategic teams have since undergone the largest transformation from a split in local, regional and global teams into category teams as part of our global Material Group Management (MGM) and on the other side Supply Business Partners (SBP). Our SBPs are now forming the backbone of Procurement to meet all imminent needs of our internal stakeholders. They are close to all internal customers and help MGM with their strategy implementations but will also be a source of information for other procurement colleagues when it comes to understanding our customer’s pains & gains better.
«"One of the biggest challenges, I believe, is the change from being in personal contact with our customers, partners and supply partners to digital ones"»
Thomas Zsulits - Director Global Procurement, Doka
In order to ensure a smooth transition for its procurement transformation, Loos adds that “from the very start, there was the idea to put SAP/MM in place and have a catalog system to minimize the workload for our operational procurement. And alongside a proper P2P process, we’d enhance our data with proper spend classifications and that way could improve our spend visibility over time. Crucial for effective strategic work.
We’ve now introduced this solution in our headquarters in Austria. It has been a substantial project for us, and we are grateful for the support of our partners.”
When it comes to effectively implementing a strategy like this, Zsulits highlights the importance of having the right culture in an Organization. “It's very important. In fact, it has been a major success factor for us. With our new structure, employees have to be proactive and understand our customer needs. At the same time, they have to lead our customers to get the best results in the interest of Doka. They have to be interested in the numbers they see as well as to be able to adapt to the variable requirements of our fast evolving markets, customers, partners and Organization. So there has definitely been a need for mindshifts here, and this is something we’ll have to continue to work on. We believe this will be a key for the success of our procurement organization moving forward.”
Like many Organizations around the world, Doka has been faced with challenges due to COVID-19. “One of the biggest challenges I believe is the change from being in personal contact with our customers, partners, and supply partners to digital ones. The highest impact was probably on our risk management. The only tangible contact with suppliers was basically our incoming goods inspection, the rest had to be managed digitally or over the phone,” comments Zsulits. To overcome these challenges Zsulits continues to explain that to address the lack of personal contact, Doka increased the frequency of communication with its partners, customers and employees. “We try to understand the situation they are in. In the past discussions were more around technical topics – how are we solving this topic? How can we provide/improve this service? – and now it is more about circumstances, financial balance, and support. It's important to understand their fears because nobody knows what to do in this situation right now, we are all experiencing this for the first time. So if you know their fears and the situation they are in, you are then able to find a common way to help each other. So together we are trying to establish this new way of partnering, which I believe – looking to the future – will create a new way of cooperation when it comes to risk management.”
Further reflecting on the future for Doka and the construction industry, both Zsulits and Loos agree that as populations grow so will the markets need for the construction industry. “The construction industry continues to grow worldwide, so I believe the future will be very positive for Doka because with this growth our services and products will be needed even more than they are needed today. So the question is, how will we participate in that growth, and I'm very convinced that with our products and our global structuring Doka will be able to participate in this positive trend,” comments Zsulits. Adding to Zsulits’s comments, Loos concludes, “as the population grows, there will be a need for construction, both on the infrastructure side, as well as on the private housing side – and to echo what Thomas said – I think Doka is set up really well to emerge from the corona crisis with new opportunities.”