Sirona’s strategic purchasing accounts for a sizeable portion of its income. It called on SynerDeal, which promptly cut the German firm’s purchasing expenditure by 25% and upped its net margin in months.
Sirona, formerly a Siemens AG division, is the world’s leading manufacturer of dental equipment and generates € 284 million of sales. Following its management buyout in November 2003, backed by EQT, an investment fund, it underwent a deep-reaching reorganisation – which involved setting up a central purchasing office for its strategic products.
Some time before that, Sirona had already chosen SynerDeal’s expertise and technology, using its SynerValue programme to spot and tap into new cost-cutting opportunities within its purchasing portfolio.
Different strategic product families (including electrical devices, plastic components, composites and metal sheets) revealed a number of cost-cutting opportunities as a result.
SynerDeal’s main goal, then, was to streamline Sirona’s supplier base. It did so using its eSourcing platform to find new potential suppliers on a worldwide scale. It then assessed and balanced the bids and coached Sirona through the final classic or reverse-auction negotiations.
SynerDeal teams worked shoulder to shoulder with their Sirona counterparts throughout this process, equipping the latter with new purchasing practices while enabling them to build on acquired skills.
Before five months were up, Sirona was looking at an average of 25% lower purchasing costs in selected product families – while purchasing ate up a fairly substantial 50% chunk of its revenues
(€ 135 million in total, including € 90 million for production purchases).
That first experience prompted Sirona’s purchasing department to put other strategic product families through this system – and ultimately to do the same with non-production purchasing.
Sirona’s Purchasing Director Edwin Ehrhard commented:: “Our goal was to shave 15 to 18% off our costs. But SynerDeal cut our costs by up to 25%.”
SynerValue
SynerDeal offers industrial SMEs a full programme including the eSourcing platform rollout and associated know-how transfer, the 4 stages are as follows:
- Initialisation: SynerDeal takes a careful look at your purchasing portfolio, spots potential gains by product family, and sets up a fully dedicated ePurchasing platform.
- Missions: SynerDeal conducts the renegotiation operations while transferring all market and product intelligence acquired in the process.
- Generalisation and coaching: at this point, SynerDeal watches over the teams and ensures operations run smoothly. Teams thus build on know-know and pool purchasing-related intelligence from the start.
- Client teams use the platform autonomously: buyers, here, use the platform single-handedly to consolidate and streamline their requirements and to standardise tendering management processes.
Sirona
Sirona is a world-leading manufacturer of dental equipment and has played a high-profile role in efforts to promote technical progress and thereby treatment cost-efficiency in dental surgeries and laboratories. Its four divisions – Treatment Centres, Imaging Systems, Dental CAD/CAM Systems, and Handpieces and Sterilizers – are positioned on expanding markets and enjoying commensurately handsome growth. In its latest fiscal year (2002-2003), Sirona generated sales of € 284 million and an EBIT of € 52 million.
www.sirona.fr
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