In 2023, significant progress was made in centralizing Van Leeuwen's European purchasing power. Lisa Hannes, Head of Procurement and European Procurement Manager, was closely involved in this process and reflects on an intense year.
Lisa pursued a master's degree in mechanical engineering & business management in Paderborn, Germany, and started working at our company in 2010. Since 2016, she has held various positions, all related to procurement. Currently, she has two roles: she is responsible for the German Procurement Department and she is one of three European Procurement Managers at Van Leeuwen, focusing on the hot-rolled seamless tubes and bar steel product segment.
Combining market and product knowledge
‘Procurement and everything that comes with it, is my expertise,’ Lisa says. ‘Over the past few years, there have been quite some changes in my field. In just a couple of years we centralized procurement throughout our entire organization (see side bar). This is a significant Van Leeuwen strength: we combine all our market knowledge with our product knowledge and maintain good relationships and strategic long-term partnerships with our suppliers. As a result, we can optimally serve our customers. Moreover, while we do not necessarily aim for the lowest price, we always aim for high quality. Additionally, we work closely together internationally: we have several hubs throughout Europe. There, we gather specific materials and consolidate all the stocks for a particular product under one roof. Our customers also benefit from this concentration because we ensure that they also have access to the entire Van Leeuwen product portfolio and never have to wait too long for their orders. It's challenging, but that also makes the work enjoyable.’
Volatility
Another phenomenon in recent years is the increased market volatility and speed in our business. Lisa: ‘Volatility has always been there, but the speed at which we need to react or, preferably, anticipate proactively, has significantly increased. This makes the procurement profession more challenging, because we need to respond to market developments increasingly faster. Our approach here is to get even closer to our customers and suppliers in order to be as closely involved as possible in all those developments and to be quickly informed about them. ‘Connecting Worlds’, the theme of our centennial year, is crucial here: without the right connections internally and externally, you cannot be a successful steel pipe and tube distributor.’
A year of contrasts
2023 was a year of contrasts for Lisa. ‘In the first half of the year, we faced high demand and high prices. Then there was a drop in demand. This was caused by the fact that so much had been purchased in advance, leading to hoarding in some areas. This volatility had various causes: there was a lot of additional demand after COVID had disrupted supply chains. Then came the war in Ukraine, the disrupted supply from China, and the extended obstruction of the Suez Canal. Furthermore, our customers faced a shortage of other materials such as microchips, causing some projects to be delayed and thus they simply needed less steel. The increased interest rates also had an impact: projects were canceled or postponed, and working capital, and therefore stock levels as well, increased. As a result, demand normalized to prior year levels, and all in all, we still had a good year.’
Automation
In 2023, Van Leeuwen increased its degree of automation and is now poised to reach a next higher level in 2024, says Lisa. ‘For example, through electronic data interchange (EDI), we can directly connect our systems to those of our suppliers and customers, and thus quickly respond to changes in customer preferences. We gather a lot of data this way, and in 2024, we expect to reach an even higher level of automation, for example by making use of intelligent systems. We will also migrate all of our business systems to a single ERP system: SAP S/4HANA. Furthermore, sustainability is a significant theme, because our customers are increasingly working on this, and also because the industry itself will have to become greener. Van Leeuwen considers sustainability important. It is one of our key spearheads, and we are convinced that we can play a key role in reducing CO2 emissions in our sector by bridging the gap between our customers and suppliers.’
From coal to a sustainable future
The Van Leeuwen facility in Duisburg, located in the heart of the Ruhr area, has a long history in steel distribution. During the Industrial Revolution (end of 18th century), the German Ruhr area evolved into the center of the German coal mining and steel industry. In April 2014, construction work started on a central warehouse at a location near the Duisburg harbor, which was built in the seventies. The company invested heavily in this warehouse; for example, by building the most advanced automated high-rack system for steel pipes in Europe here in 2015. ‘Van Leeuwen is a strong player in the German steel distribution market, and I foresee a bright future for our activities in Germany, in which sustainability will play an increasingly important role,’ says Lisa Hannes. ‘We have already started up various sustainability initiatives to make the steel chain greener. We do this by working together with mills, because that's where the greatest climate gains are to be made.’
Successful centralization of European procurement activities
‘One of our biggest success stories in 2023 is the centralization of our European procurement activities,’ according to Lisa Hannes. ‘We now have a local procurement department in each country, and they are connected to the international European procurement organization by means of a matrix organization structure. It is a major achievement.
Our approach involving category managers is crucial in this respect as well. They deal with certain product groups on a strategic and tactical level and maintain good relationships with our suppliers. This way, they relieve local procurement organizations and we combine our purchasing power in Europe. It wasn't easy: over the past few years, people had to get used to the new way of working. But now we are reaping the rewards of centralized procurement, and this is something we can all be proud of. I consider it a major success, in part because our customers also benefit from our procurement knowledge and purchasing power. Not only at the pricing level, but also at the product and geographical levels, no matter where in the world, because we also apply the ‘Connecting Worlds’ concept to our procurement activities in this respect.’
