Delivering tail-end efficiency for global logistics leader

Putting a stop to process problems

LGI provides industry-specific supply chain solutions – from automotive and electronics to healthcare and fashion – for customers across Europe. Considering its own streamlined services, this approach was missing from its procurement processes.

The procurement team was using a customised tool, not supported by the manufacturer, and all orders, suppliers and articles still needed to be created manually. This meant long lead times, high processing costs, and an unmanageable workload. Knowing the existing process was unsustainable, LGI started looking for a better option.

Discovering a different way

While attending a purchasing expert panel, LGI’s Head of Corporate Procurement Uwe Rehorsch heard about Unite. “We then compared different solutions based on necessary interfaces, and the availability of marketplace solutions and costs,” Uwe said.

LGI needed a solution that could handle tail-end spend and the procurement of frequently used items from office supplies and consumables to occupational safety equipment and IT accessories.

“The most important thing for us was the ability to integrate into our group structure – several companies, with different locations and billing addresses,” he said. After an in-depth selection process, Unite’s Mercateo Marketplace and Procurement Portal came out on top.

Decentralised and in the driving seat

With no need for integration with an ERP system, LGI chose to use Mercateo as a web-based solution. This gave 350 staff members in distributed teams a standardised P2P process and access to the Mercateo Marketplace – an online spot market with vetted suppliers built in. Approval workflows and view management, which hides articles from certain ECLASS product groups, make the P2P process more efficient.

“Now the central purchasing department is responsible for supplier management and the management of the product portfolio,” explained Sonja Augustin; Strategic Purchaser at LGI. In particular, staff can search for what they need from known supplier catalogues (BusinessShops) and benefit from negotiated prices with BusinessShop Plus.

Money saved and measuring success

Since implementing the Mercateo Marketplace and Procurement Portal in 2017, LGI has experienced noticeable benefits when it comes to tail-end spend.

“By forwarding orders directly to the supplier, throughout times are much shorter, and costs have significantly reduced. We’ve also been able to automate other processes too,” said Uwe.

While the initial transition to Unite’s solutions by decentralised buyers was met with some trepidation, LGI invested in training and educating staff to encourage adoption. This, combined with a user-friendly interface, meant any reluctance was overcome in the first few years. After three years, 80% of orders are placed using the Mercateo Marketplace.

Next steps with Unite

Our partnership with LGI is a great example of how the Mercateo Marketplace and Procurement Portal can streamline indirect procurement processes, improve operational efficiency, reduce process costs and ensure a more unified procurement experience for widely distributed teams.

Looking to the future, LGI wants to increase the use of Unite solutions in its various locations and benefit from new features currently in development. “We plan to continue working closely with Unite so we can be supported and help shape the future of the platform,” said Sonja. “We don’t want to stand still but keep developing together.”