More than 80% time savings in supplier evaluation thanks to process automation
published on
27.11.2024
🏗 Industry: Medical technology
🗺 Company headquarters: Wetzlar (Hesse)
🧍 Employees: ~ 550
💶 Turnover ~ € 110 million per year
Purchasing volume ~ € 25 - 30 million per year
Oculus Optikgeräte develops first-class ophthalmological instruments that are used to diagnose eye conditions and vision problems. The product range extends from classic optical spectacles to highly complex devices that can, for example, examine the cornea or the inside of the eye for pathologies. In addition, Oculus offers supportive optical aids for corneal surgeons, for example. Over the past three years, Oculus has recorded impressive growth, both in terms of turnover and the number of employees, with double-digit percentage growth rates.
"What I have always experienced in the past: You don't have a central tool for your supplier information where you can actually retrieve and evaluate it. The information is always somewhere behind some drive. But I can't select, compare or evaluate it here - and that's exactly the problem that Tacto solves." - Sven Weber, Head of Operations Oculus optical devices
However, Oculus' impressive growth in recent years has not been without its challenges. On its way from a small mid-sized company to a larger mid-sized company, Oculus had to fundamentally adapt its organizational structure and streamline processes, particularly in purchasing.
The procurement processes at Oculus were largely managed manually and operationally, which meant that no resources were available for non-operational tasks. Only what needed to be ordered was ordered and there was almost no time to adequately track delivery dates. As a result, purchasing at Oculus was constantly in "fire fighting" mode.
A major problem was the lack of transparency and decentralized data management. Although the allocation of materials to product groups and suppliers within these product groups was a strategic guideline, it was almost impossible to implement at Oculus due to the data situation at the time. Reports and evaluations were distributed across three different systems (ERP system, Excel and Felios) and their preparation was difficult and time-consuming.
Added to this were the challenges in supplier management at Oculus. Standard queries such as supplier self-assessments (SSAs), supplier long-term declarations (LLEs) or mandatory supplier information were processed manually and required increased manual effort.
Furthermore, patient safety is the top priority in medical technology. In concrete terms, this means that suppliers from whom even individual but safety-relevant components are procured must be evaluated particularly thoroughly, regardless of the size of their share of sales. As Oculus procures a large number of safety-relevant parts from various suppliers, a comprehensive evaluation of a large number of suppliers was required. This supplier evaluation represented a huge manual workload for Oculus. In addition to limited capacity, which only allowed for an annual assessment and only provided a snapshot, the purchasing department took more than three months to complete the assessment of over 170 suppliers. All "soft facts" relating to the suppliers had to be manually assigned and evaluated.
With this in mind, Sven Weber looked around for a tool that would firstly ensure the visibility and transparency of the data situation in order to pursue a dedicated product group strategy and secondly automate supplier management and supplier evaluation in order to free up important capacities for strategic projects and efficiently guarantee security across all parts.
Control, retrieval and evaluation of all supplier knowledge in one tool at the touch of a button
Efficient, continuous and detailed assessment of suppliers to ensure 100% patient safety
Preparation for continuous company growth with lean processes in purchasing
Sven Weber's objective was to control the entire supplier management and the derivation of product group strategies using one tool. Tacto was particularly convincing with its "one face to the supplier" approach.
Oculus started with the introduction of Tacto's analytics module in order to be able to access all supplier data transparently at the touch of a button. This was the first step towards being able to develop a comprehensive purchasing strategy. In addition, all queries to be made, such as SSAs, LLEs and other queries from Oculus, can be processed automatically via Tacto and evaluated at the touch of a button.
"By implementing the supplier management system, we not only have transparency about which suppliers we order which parts from and in what quantities, but we also have information about the capabilities and certificates of these suppliers - all in a single tool."
It was then logical for Sven Weber and the purchasing department at Oculus to dedicate themselves to automating the supplier evaluation with Tacto. Much of the supplier data collected by Tacto via queries are so-called "soft facts", which are used in the supplier evaluation to determine whether the suppliers are a good fit for Oculus or not. At the same time, "hard facts" such as punctuality, quantity and quality compliance can be taken from the analytics module and integrated into the supplier evaluation. With Tacto, Oculus is able to continuously evaluate its suppliers at any time at the touch of a button. This also results in a high reaction speed in the event of quality non-compliance with regard to safety-relevant parts. The increase in efficiency in supplier evaluation with Tacto compared to the previous manual and time-bound process amounts to more than 80%. In addition, this results in significant five-digit cost savings for Oculus.
"With Tacto, we have all the supplier knowledge in one tool and can call it up at any time at the touch of a button and from different perspectives. What I have always known in the past: You don't have a central tool for your supplier information, which you always obtain, where you can actually retrieve and evaluate it. The information is always somewhere behind some drive. But I can't select, compare or evaluate it here - and that's exactly the problem that Tacto solves."
One of the largest product groups in terms of volume at Oculus is printed circuit boards assembled (PCBAs). This was also the first product group that Oculus focused on after the introduction of Tacto. Through Tacto, Oculus was able to determine how much spend was incurred with which supplier and how many suppliers were represented in this product group.
Through the analytics module, it was determined that one supplier with an extremely high volume posed an increased risk of potential delivery failures, particularly in terms of capacity. To mitigate this risk, Oculus developed a strategy of retaining two suppliers and replacing two with better performing suppliers.
By utilizing SSAs, Oculus was able to create a shortlist of potential new suppliers, and ultimately Oculus added three new suppliers. These insights and actions would not have become apparent so quickly without Tacto.
The collaboration with Tacto was perceived by Oculus as very uncomplicated. The implementation was very simple and pragmatic throughout all the steps. In addition, the regular meetings were very helpful, especially at the beginning of the collaboration, in order to find and correct all errors and to clean up the database. The focus is always on solving problems.
In 2024, Oculus will start using and introducing Tacto's LkSG module. Although Oculus is not directly affected by the scope of the LkSG, it has already received customer requests from directly affected customers and wants to prepare for future legislation at European level. Sven Weber sees Tacto as a long-term partner for purchasing. Sven Weber sees joint potential particularly in the area of savings measurements.
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Many thanks to Sven Weber and the entire team at Oculus Optikgeräte for our partnership and trustworthy cooperation.
Thanks to partners and customers like you, it is possible to further develop our product in close exchange and close to daily events, as well as to talk in joint webinars about the topics that concern the procurement of industrial medium-sized companies today.
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