“This is a big step. We are now replacing 70-80 suppliers with TESS,” said buyer Knut Nistov when partners TESS Vest and Boliden Odda opened a Partnershop supplies warehouse internally within the long-established processing company. Many people within the company are now excited to see how the new scheme will work.
The official opening ceremony was held on Tuesday 4 June. TESS Partnershop Boliden is an attractive addition to the total range of 13 staffed TESS Partnershops. The organisation will be staffed daily by newly appointed department manager Harald Molven and Olav Prestegård from TESS Odda. Over ten years ago, Prestegård was employed in the TESS Partnershop at Odda Smelting Plant.
The cornerstone company at Eitrheim is the region’s largest industrial enterprise. It has over 290 employees and is an impressive sight with its extensive buildings, which are divided into many functions. Boliden Odda, previously known as Norzink, mainly produces pure zinc and zinc alloys. The ore arrives by ship from overseas, and the majority of the manufactured products are sold on the export markets.
A time of recognition
Behind this big step is the recognition that the previous purchasing system was unnecessarily costly. Operations and maintenance products (MRO) were procured by almost all employees within the company. The majority of employees had the authority to carry out the necessary purchases, and a lot of time was spent on making large and small purchases “left, right and centre,” according to Nistov. This resulted in large amounts of time being spent on procurement and extremely high transaction costs in relation to the products’ value. Two years ago, the previous system was tightened up. Those who purchased small products were not permitted to make purchases totalling above a certain amount. Almost simultaneously, management expressed a clear wish to make the procurement of operations and maintenance products easier and consequently cheaper.
“The next step for us was to go out into the market and ask suppliers for suggestions. A competitive tendering process was initiated, which was finally won by TESS. Nobody else was able to offer a system similar to the Partnershop scheme,” says Knut Nistov, who is looking forward to his own time being freed up so that he can focus on matters other than small products. Purchasing manager Endre Lillestraum has been an important contributor in terms of finalising the concept and supply model. Boliden has provided extremely detailed routines and processes in connection with the establishment of the concept. The preparatory work has been carried out so thoroughly that this is regarded as a key success factor from both parties’ points of view.
To read the full press release, please visity the TESS AS website.