GRAMMER AG

The Challenge:

LIMITED VISIBILITY INTO COMPLEX SUPPLY CHAINS A BARRIER TO RAPID ADVANCEMENT OF ESG AGENDA

Grammer is an early mover in the ESG space but, like many other sustainability-minded manufacturers, found it had to find a way to advance its environmental targets while also balancing supply chain disruption stemming from the COVID-19 pandemic, inflation, geopolitical tension and evolving regulatory requirements, including the German Supply Chain Act (commonly referred to by the German acronym, LkSG).

“Grammer is focused on gaining traction in environmental protection and we would like to be a leader in the market. Not only from a technical point of view, but also from a sustainable one in that our products have a green footprint and declining carbon dioxide (CO2) emissions,” explains Gerd Kittel, Senior Manager of Digitalization Processes and Data Analytics and Leader of Operational Purchasing at Grammer AG.

The automotive and commercial vehicle manufacturers that use Grammer’s products have high standards for sustainability and are looking to their suppliers to help meet those targets. The same is true for Grammer. Manufacturers have many options for reducing Scope 1 and Scope 2 emissions, but slashing Scope 3 emissions in the supply chain requires strong relationships with suppliers and visibility into their sourcing functions.

Under laws such as the German Supply Chain Act, companies must also be able to verify that their supply chains comply with stringent environmental and human rights standards. Traceability is essential, as is the flexibility to move between suppliers when disruption hits or if a material doesn’t meet certain ESG criteria.

This can be challenging considering only 6% of companies report having full visibility across their supply chains. Supply chain disruption isn’t new, but the COVID-19 pandemic illustrated just how costly it can be. As a result, 93% of companies committed to making their supply chains more flexible, agile and resilient after the pandemic, but few saw significant gains 12 months later.

Sustainability is at the heart of everything Grammer does, but it’s equally committed to innovation and capturing more of the market for commercial vehicle seats and interior automotive products.

“We would like to not only be a service partner, but also a technical leader in the markets we serve. We would like to offer our customers a broad variety of services and a wide range of products from Grammer company,” states Kittel.

The Solution:

QAD SRM GIVES GRAMMER MORE CONTROL OVER AND VISIBILITY INTO GLOBAL SUPPLY CHAIN

Grammer was and continues to face many complex challenges and needed a supplier management solution that would foster collaboration among its global team, streamline the procurement process, facilitate good communication and strong relationships with suppliers and deliver end-to-end visibility into its supply chain.

Grammer found the right tool with QAD SRM. The company implemented the solution in 2015 and licensed QAD Auctions, Supplier Data Management and Sourcing.

“Our previous supplier management system wasn’t very flexible and that was a major topic at the beginning of implementing ASTRAS by Allocation,” explains Kittel, referring to the name of the solution before it was acquired by QAD in 2020. “With QAD SRM, we have the flexibility to do a lot of things.”

“QAD SRM allows us to drive complex topics in a proper way and we are able to manage things by ourselves,” continues Kittel. “Based on that, we decided that it was the right thing for our scope.”

Today, Grammer uses QAD SRM to manage its whole pipeline. The company is integrating the solution with PLM, ERP and its sales and operations planning (S&OP) and risk management solutions to deliver an end-to-end smooth process.

“We are really using QAD as a single point of truth for the buyer and continue to connect different departments to it for supply management. That’s a differentiator for QAD compared to other solutions,” explains Kittel.

The Benefits:

QAD SRM HELPS GRAMMER SLASH SCOPE 3 EMISSIONS AND BUILD A RESILIENT GLOBAL SUPPLY CHAIN

“This is a huge impact for us as a supply chain management team. We are still taking Initial steps but these results mean the basic approach is working and we are looking forward to making bigger steps in the future,” states Kittel.

"QAD's collaboration capabilities enable us to implement a subsystem with the details needed to identify gaps in our supply base. We are not only analyzing costs, but also risks and topics like ESG. We are asking our suppliers to give us the CO2 footprint for their parts and they have to guarantee that they are fulfilling this,” explains Kittel.

“We have a code of conduct in our company and we have it for our suppliers, as well, because we know the responsibility Grammer has to the market. If we are choosing the right supplier for the right products and, if we are having a positive influence on working conditions, then we are doing the right thing,” continues Kittel.

“We are using our sourcing templates to drive our suppliers to go in the same direction,” adds Fernanda Dorantes, Process Digitalization Manager at Grammer AG. “As a result, a lot of our suppliers have integrated the same kind of processes and analyses, which is making their presence more linear and environmentally and socially conscious.”

“Digitalization can be a complex path for supply chain end users. With QAD SRM, you can feel a difference in transparency. We can share and analyze all of our information globally,” continues Dorantes.

“QAD SRM covers the spots that, without digitalization, we wouldn’t be able to see. This includes risk from our suppliers. We always have a database available for everybody. Transparency has been a huge positive impact for us.”

“The ability to conduct analyses has also helped a lot of our users. We can conduct a complex analysis on everything we use for our company, including ratings, risks, sourcing, collaboration, quality performance and so on.”

“We increased our A supplier rate by 12% last year because the connectivity of our systems makes it easier for people to follow up on certificates, and pushing Quality initiatives to suppliers,” adds Kittel. Grammer evaluates and rates suppliers on a monthly basis and provides feedback to help suppliers identify opportunities for improvement.

Suppliers often complain about digital systems because there has to be an agreement on standards, contracts, certificates and other processes, but QAD SRM has removed that obstacle for Grammer, explains Kittel. Supplier buy-in helped Grammer increase its usage of the system by 150%.

“Our expectation is to have a system that is as simple as possible, as user-friendly as possible and as flexible as possible,” adds Kittel. Grammer found QAD SRM has the potential for it, but it also found a partner that would work with the company to work together towards a point where the solution would function exactly the way it wanted it to.

“That is really one of the big advantages,” says Kittel. “I personally appreciate having a partner on the same level and who shares our vision.”