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Prize winner
Published by:
WHU - Otto Beisheim School of Management (2014)
Version:
2013-10-01
Length:
30 pages
Data source:
Field research
Abstract:
The case covers the procurement department of one of the world’s leading fast-moving consumer goods and adhesive producers: Henkel AG & Co KGaA. In January 2013, Katharina Wallace started her new job as Global Head of Polyesters, one of the top five material categories in Henkel. However, the major disadvantages for Henkel are the nearly non-competitive price levels for polyesters with the current supplier, Alpha, and the high dependency on the supplier because of a single sourcing situation for certain polyesters. As a result of these challenges, Henkel’s sales have been declining in this area for twelve consecutive months, even though the polyester market is growing overall. The sales function is putting increasing pressure on purchasing to improve the current situation, and Katharina has to define a strategy for solving the current challenges within the first quarter of 2013. Only an immediate intervention in the current supply situation will allow Henkel to achieve the ambitious targets defined in the strategy roadmap for 2013–2016: 20 billion euros of turnover by 2016. Consequently, Katharina has to mitigate the current supply situation with a clear strategy that involves all internal stakeholders, including sales, R&D, and supply-chain & operations, as well as supplier Alpha and any potential supply alternatives existing in the market.
Learning objectives:
1. Introducing the DNA of a world-class purchasing organisation. 2. Understanding that high volatility of Polyester’s feedstocks has a direct effect on purchase prices. 3. Comprehending the life-cycle of specific materials and how this provides periodic opportunities to identify alternative sources for these materials, as well as to identify cost savings and potentially harmonise material use to maintain competitiveness. 4. Learning about mitigating and managing a single source situation. 5. Understanding the organisational structure and division of responsibilities within Henkel which require stakeholder management and cross-functional collaboration.
Settings:
Germany, global, FMCG and adhesives, 2013, Fortune Global 500
Prizes won:
2014 - John Molson MBA Case Writing Competition - $1000 prize winner
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