BayWa AG: Optimized with dbh process for supplier declarations

Supplier declarations enable the use of preferential customs rates – this is good for the customer as they can save money and good for the exporter because their products also become more attractive to third countries. Moreover, the importance of supplier declarations is growing day by day: markets demand ever more product transparency and at the same time the number of non-EU countries in which supplier declarations offer their advantages on export is growing. As is well known, trade agreements between the EU and Japan, Singapore and Vietnam are in the pipeline. For an internationally operating trading corporation like BayWa AG (323 subsidiaries, 3000 locations in 41 countries, 17500 employees), this means in sum that the topic of supplier declarations must receive high attention.

The company benefits from a process fundamentally restructured in 2014 for handling currently around 17,000 supplier declarations. Instead of managing documents as they once did decentrally offline, they are now managed digitally by a central unit. All processes have been digitalized with few exceptions, they are recorded and archived in a legally compliant manner. It is no longer hundreds of colleagues across the company managing the topic as a side job, but rather two specialists in the central supplier declaration management team are at work, handling the topic with high expertise and thus completely correctly and efficiently.

BayWa AG and selected subsidiaries benefit from this shift as the quality of supplier declarations has made a leap forward. And above all because the many former administrative staff in the field are now freed from this topic and thousands of suppliers are provided with an efficient, easy-to-use process that enables them to focus on their actual tasks.

In 2014, the BayWa Group introduced centralized supplier declaration management with dbh Software Advantage Compliance Preference Management, which has been continuously expanded since then.

Problem: Many internal stakeholders dealing with supplier declarations

The situation regarding supplier declarations and supplier long-term declarations (LE/LEE) before 2014 at BayWa was similar to what you might find in other large companies: many internal stakeholders (procurement, sales, locations) from different divisions communicated with suppliers regarding supplier declarations.

At BayWa, manual handling of supplier declarations created high effort. Suppliers rightly complained that they were sometimes repeatedly contacted by several departments on the same topic, creating multiple efforts. Additionally, the archiving of LE/LEEs within BayWa was very broadly distributed and assigned to individual business units.

With a clear view of the current status, it was clear to BayWa at the time that there was a need for optimization in this area. Especially since the digitalization of essential business processes is an stated strategic goal of the group.

New insights thanks to dbh software support

When searching for a solution partner for this challenge, BayWa decided on the Advantage Compliance Preference Management product from dbh Logistics IT AG. Alessandro Herke, Head of Customs and Export Control at the publicly listed group, comments on the collaboration: “dbh not only brought the right solution with the software product, but was able to score with high expertise in customs and foreign trade issues right from the first conversations. We had straightforward and good communication from the start. Furthermore, dbh demonstrates high IT competence not only with their own products. And they showed themselves to be very open to new ideas and joint further development from the beginning.”

Advantage Compliance Preference Management

The dbh software Advantage Compliance Preference Management is ideal for a trading company like BayWa because, among other things, with a large product range and many suppliers, a very good overview of all supplier declarations can be achieved. Looking at an article references business partners, for example, making it easy to determine who supplies these articles throughout the company. At the same time, looking at the supplier quickly shows which articles are provided by them. This is information that the company previously could only determine with effort and which is now very valuable.

Since 2014, Advantage Compliance Preference Management has provided BayWa with centralized management of all incoming and outgoing supplier declarations from a single system. For example, with just a few clicks, outgoing supplier declarations can be generated from incoming supplier declarations.

BayWa can rely on every declaration being one hundred percent legally compliant and containing the wording specified by customs. The standard form includes all countries that are relevant for supplier declarations. Status overviews, reminder functions, and for example the printing of certificates of origin round out the functionality. The system can also be used for all company divisions and subsidiaries. Design and texts can be customized.

Central innovation in the digital process: communication regarding LEs takes place digitally, paper communication is reduced to a maximum.

BayWa optimizes supplier declaration process with dbh

However, an abrupt switch to digital is not possible for legal reasons. In order for BayWa to obtain an electronic declaration, the supplier must first sign a corresponding declaration. BayWa has therefore developed a process in which the initial contact with the supplier still takes place in paper form with the original supplier declaration. For this purpose, a starter package is sent. This includes a personalized cover letter, the pre-filled supplier declaration, a product list, the declaration of commitment, and an addressed return envelope.

The supplier declaration and product list are provided with a barcode for easy assignment in the system. Thus, when the supplier returns the package, the incoming LLE can be directly assigned digitally after content verification. Suppliers who have also signed the declaration of commitment when the package is first sent are then able to confirm future declarations online or by fax. This way, the trading corporation simultaneously reduces the effort for suppliers and significantly reduces paper consumption.

Joint further development

However, merely installing the software product was not enough. BayWa, with its numerous and varied suppliers, had its own requirements. Over the course of their collaboration, dbh and BayWa created several joint developments.

For example, industrial customers of BayWa can complete their supplier declarations in a protected web portal. To minimize the time required for suppliers, a web link solution was also developed. The supplier receives an email and can automatically confirm their supplier declarations with a single click on the link contained in it, without having to fill in anything.

From BayWa’s perspective, these developments are small but essential features that increase usability also for the customer/supplier side. If a supplier does not wish to be contacted electronically, an offline procedure is still available to them. They receive the supplier declaration by mail, including illustrated completion instructions and a pre-printed return envelope. Thus, today’s solution is a true multi-channel process that covers all requirements of the heterogeneous supplier landscape.

Taking suppliers along

In converting the LE procedure, it was important for BayWa to bring suppliers along and gain buy-in for the new process. Since some suppliers have not yet dealt more intensively with the topic and do not necessarily intend to. The redesign of supplier declaration management therefore included comprehensive change management.

On the one hand, there was a briefing for all internal employees with supplier contact, so that they could answer any questions that arose. BayWa also produced several communication tools, including an explanatory video that presents the basic topic and visualizes the benefits of the new solution very well. With these measures, it was possible to quickly achieve high acceptance of the new procedure. Collaboration with suppliers on this topic has been significantly improved and simplified and was therefore able to provide relief on both sides.

BayWa’s supplier declaration management is part of the Customs + Export Control department and is assigned to the Corporate Compliance division. Two of the eight employees working in the Customs + Export Control department are centrally responsible for BayWa and various subsidiaries. In addition to the obvious quality gains, there are significant relief measures for many employees in the field who previously dealt with the topic alongside their main task. And because BayWa can use all preferential customs rates on exports thanks to complete LE documentation, it is possible for customers to save real money. This keeps BayWa an interesting trading partner, from which suppliers ultimately also benefit.

Stronger SAP integration

However, BayWa does not intend to stop at the current status in terms of process optimization. The dbh product Advantage Compliance Preference Management is currently installed on-premise at BayWa’s corporate headquarters in Munich and runs as a standalone solution. However, dbh also offers simple integration with the ERP system via so-called SAP plug-ins.

With 323 subsidiaries, 3000 locations in 41 countries on all continents, BayWa is active worldwide and employs 17500 employees. The Munich-based company operates in the fields of agriculture, energy and construction, as well as the development segment Innovation & Digitalization.