Novozymes restructures procurement

A new central structure ensures transparency within procurement and liberates capital for research and development.

The procurement function is an important link in the value chain and a company like Novozymes that purchases products all over the world needs to keep track of all the processes. ”We are very aware of what we buy and whom we buy from,” says vice-president of Executive Buying Ken Friis who is deeply involved in restructuring Novozymes’s procurement function.

”We wish to show that our part of the organization, too, creates value,” Ken Friis adds. ”We support the company’s objective which is to reach sales of DKK 10 billion by 2010 and we see our efforts as one way of promoting this goal. We save money and by doing so, we liberate capital to be used for research and development, among other things.”

The employees are involved in making decisions

Novozymes has research and production units in Europe, North America and Asia and is represented in 22 countries. Before, procurement was carried out locally; each country had its own prices and suppliers. However, this practice complicates the administration and does not always result in the most favorable deals.

Therefore, Novozymes’s procurement department has created a new centrally managed structure which ensures transparency and consistency when buying everything from raw materials for the enzyme production and products for the many canteens to ballpoint pens and printer paper for Novozymes’s offices worldwide.

To make the procurement systematic and to create an overview of all purchases, they are now divided into categories. Within these categories, employees from various departments define precisely what is needed for specific processes in the areas of research, production, sales and administration.

The internal structure is combined with a revised procurement policy and a review of all suppliers, e.g. with regard to socially responsible behavior.