UNE Standard 15896 on Value Added Purchasing Management is the first supranational standard in the field of purchasing. The objectives of this certification are to bolster purchasing policy, ensure that management is focused on the principles of transparency, objectivity, and competition, and encourage the continual improvement of operations and their constant efficiency. It also aims to promote rigorous and credible cost control, align purchasing objectives with those of the organisation, and assist the professionalization and development of the purchasers’ professional careers.
In this context, THIELMANN PORTINOX SPAIN wanted to take a step forward and initiate the certification process, intending to achieve an excellence rating for the procedures carried out by its purchasing department, by adjusting their department to current best practice. In a preliminary audit conducted by the consultancy firm Fullstep, it was ascertained that they were not far off achieving it and they decided to get certified. The worldwide manufacturing company for stainless steel container solutions therefore initiated the certification process according to UNE Standard 15896, with expert consultation on optimising purchasing management, at the beginning of 2017.
For its part, Fullstep organised and carried out the audit work in three phrases during the course of 2017. In March they began cost analysis and diagnostics of the present situation of the company’s purchasing department, with reference to the requirements of UNE Standard 15896. After two months of assessment, and on completion of these first two steps, the consultancy firm brought to the table its proposals for improvement. Fullstep identified that THIELMANN PORTINOX SPAIN’s purchasing procedure was consistent with best practice, and put forward 23 specific but non-critical actions to help the company successfully secure the certification. From there, the company’s purchasing team, based in Granada, set to work intensively from October until July, putting these proposed actions in place to achieve their aim of acquiring certification. To that effect, it was necessary to introduce an adjustment plan.
Thanks to the positive diagnostics results on the part of consultancy firm Fullstep, Bureau Veritas initiated the certification process for THIELMANN PORTINOX SPAIN’s purchasing process, which it carried out in three phases, in accordance with the regulation of Spain’s professional purchasing association, AERCE, and which was completed in less than a month. The process was concluded in November 2017 through Bureau Veritas.
Any adjustment process, especially when it is for the purposes of improvement, has the potential to flag up certain critical issues, however, as Jose Melgar Cortes, Chief Auditor at Bureau Veritas, “no critical issues that could challenge the certification, or that would enter into conflict with the requirements set by AERCE, were identified”. On the contrary, what this process has done is highlight certain opportunities for improvement, certain observations, that the purchasing department should follow to further the process of improvement initiated with the establishment of the purchasing system.
For Fullstep, the conclusion was the same. As Agustín Ull, Director of Consultancy and Implementation, has said, efforts centered on establishing the obligatory analysis and comparison of offers for non-critical supplies, by implementing the best practices already in place for critical supplies. In addition, changes to the purchasing policy and strategy needed to be made to guarantee that they were completely consistent with strategic intent, as well as changes to the organisation’s high level policies.
BENEFITS OF UNE STANDARD 15896
With regard to the benefits that UNE Standard 15896 certification will bring to the company based in Granada, Fullstep highlights improvement to internal control of the purchasing budget, given that it establishes control systems and monitoring; ensures that regulatory compliance with the company’s legal responsibilities, established in Organic Law 5/2010, in the area of expenditure cycles, is fulfilled; and in this particular case, grants the organisation the prestige of being the first Spanish company in this sector to obtain the certification, which boosts its internal and external image, on the level of management transparency as well as expenditure controls and fulfilment of contract procedures.
The moment a company commences a certification process of this sort, its purchasing function becomes strengthened since, as Ull explains, “[the company] tries to follow proper practice so it can see properly what its “purchasing function” is like and to identify its strengths and weaknesses. Once the company is certified, it enters into a continual process of improvement which obliges it to improve year after year on supplier certification, procedures, etc.”
For Iván Martín, Worldwide Director of AERCE Regulation, “this certification will mean the company has to be at the forefront of best practice for purchasing, based on a model that will demand them to be constantly seeking innovation, transparency, and continuous improvement. It will also allow [the company] to develop all of the members of the purchasing team on a professional level.”
RECOGNITION OF PURCHASING FUNCTION
Manuel Carvajal, Director of Supplies and Logistics at THIELMANN Group, and José Antonio García, Purchasing Department Manager at THIELMANN PORTINOX SPAIN, recognise that the current state of their purchasing department achieves, within their organisation, greater recognition “thanks to a stronger vision for our purchasing strategies, transparency towards internal clients, and suppliers, as well as a stronger leading position, which allows us to broaden the perimeters of our activity in purchasing services, which historically has been carried out in other areas, like the subcontracting of working staff, marketing purchases, and MROs”. Furthermore, both managers add that “the most important thing is for us to enter into a programme of continuous improvement, where not only will our purchasing procedures be undergoing assessment and improvement, but where we will be broadening the perimeters of activity within the company, and as such placing ourselves in a stronger leading position within the organisation”.
According to Bureau Veritas, benefits of the certification for purchasing function focus largely on two points: firstly, helping to reinforce the positioning and visibility of the purchasing department within the group, and secondly, promoting advances in the involvement and performance of the other departments, in purchasing requirements and guidelines.
In addition, the Bureau Veritas’s Chief Auditor highlights that the certification also encompasses CSR requirements which are assessed during the certification process, in the context of the purchasing process’s responsibilities and the organisation itself, and which also apply to all of the stakeholders, and from the moment the organisation is awarded certification, the level required is higher.
RELATIONSHIP WITH SUPPLIERS
The standard favours an improvement in supplier relations, given that it implements and advances scouting procedures, and the use of tools that improve management of these relations, promoting greater participation of the part of the suppliers “as a gateway for suppliers, or the carrying out of supplier-customer assessments”, explains José Melgar, and he adds that “with regard to suppliers, it allows the demonstration of greater transparency and independence in decision making”.
In the company itself, they have seen how their supplies have noticed that, thanks to the Standard’s certification, the procedures are now far more transparent and better organised, due to the increase of long term contracts. In the same vein, but with regard to supplier approval procedure, “we are now more demanding and take into account factors like financial reviews, reputation, and quality of supply”, affirm Carvajal and García.
This is based, according to Agustín Ull, on the obligation to document a process to be able to consider the market’s different supplier options, a consideration which should encompass the full knowledge and identification of internal purchasing needs, goods specifications, the supply market, potential suppliers, and purchasing support procedures. In the words of Fullstep’s manager, “the certification is going to allow THIELMANN PORTINOX SPAIN to coordinate supplier relations from a strategic and tactical point of view, facilitating the acquirement of goods and services of due quality and quantity, and ensuring optimum prices and suitable suppliers”.
The European Purchasing Standard presents businesses with common criteria by which to calibrate their level of purchasing management, determine a continuous process of improvement, and compare different processes being applied in companies operating in Europe. Furthermore, UNE 15896 differentiates its requirement levels, adapting them according to whether the company is public, private, or a government body, and also depending on sales revenue and employees.
Manuel Carvajal and José Antonio García note that within THIELMANN PORTINOX SPAIN’s management, there is a high level of commitment to improvement programmes “and it is something that we have applied to all areas. In our case, regular meetings with the purchasing team, planning sessions, and purchasing committees are how we identity problems on a day-to-day basis, and the way in which we are able to take the corrective actions required”.
For Bureau Veritas, the certification is specifically going to allow ongoing improvement processes to be continue, optimising its procedures and allowing more value to be added to the company. This will allow greater savings to be achieved, and shall prompt these processes to become automatic, leading to the simultaneous reduction in costs, both in the medium and the long term.
For AERCE, as for the buyer community, “it is with great pride that once again we can say that Andalusia has a company certified by Standard 15896”, says Iván Martín, and he adds that “we are certainly expecting that many other companies will be encouraged to follow in the path of excellence and ongoing improvement that THIELMANN PORTINOX SPAIN have taken. We wish them the best of luck in this new venture”.