Global E-Invoicing Success: Schaeffler Group’s Effective Supplier Engagement Strategies

An interview with Tobias Kundmüller, Professional Process Manager, Schaeffler Group

Schaeffler Group is one of the world’s leading manufacturers of high-precision components and systems for automotive, aerospace, and industrial uses. With thousands of suppliers spanning territories worldwide, they faced significant challenges processing heavily paper-based invoices and unstructured PDF documents. 

Schaeffler approached Tradeshift to help them fulfill their vision for a harmonized, digital e-invoicing system that suppliers would be highly motivated to adopt. 

We spoke to Tobias Kundmüller, who is responsible for the roll-out of Schaeffler’s global e-invoicing project. He told us more about the critical role that an effective supplier engagement strategy has played in their success. 

Watch highlights from our discussion below and keep reading for deeper insights into the discussion. 

Tell us more about the origins and motivations behind Schaeffler’s digital transformation journey.

Schaeffler sees itself very much as a technology company within the automotive industry. We see technology as the key to unlocking a massive amount of value for our customers and suppliers.

We started our e-invoicing project with Tradeshift in 2017. We’d identified several key challenges in our invoicing process we wanted to address:

• The majority of our invoices came through as paper-based documents, which did not align with our sustainability goals.

• Where we received invoices from suppliers as PDFs, these were unstructured, scanned documents. Our existing tools could not always read these documents successfully, which led to a high emphasis on manual processing.

• The channels we used to receive invoices were highly decentralized, creating a breeding ground for inconsistencies.

Climate change is also a hugely important topic for us. We are always looking for new technologies that will support the sustainability-focused objectives of our organization. Invoicing is a good example of where digitalization can make a real difference in terms of Schaeffler’s overall carbon footprint.

BONUS CONTENT: Our recent webinar, “AP Automation and Failsafe Supplier Engagement,” features more on Tobias’ story. Watch it here.

What was Schaeffler’s vision, and how did you turn that into reality?

Our vision was to standardize how we received digital documents across our entire supplier base.

We started working with Tradeshift in 2017 and went live with our European initiative at the beginning of 2018. We built on that success in 2019 when we rolled out the system in China, followed by North America shortly thereafter.

Investing in this partnership and this project with Tradeshift was a good decision. We’ve found Tradeshift to be a very responsive partner, especially in critical times like during the pandemic.

What do you see as the key factors that contributed to the overall success of the project?

Supplier engagement is absolutely essential. Suppliers need to feel motivated to make the switch to sending invoices through the Tradeshift platform. Two things in particular really helped.

First, we showed suppliers that using the new system and sending their invoices through Tradeshift was simple and could be easily adopted.

We also put a heavy focus on the tangible benefits that suppliers would see when they started sending invoices to us through the Tradeshift platform. For example, large suppliers can send invoices via EDI interfaces. It’s a lot safer than sending invoices through the post. Suppliers of all sizes also get a lot of transparency and insight over where the invoices are in the process.

BONUS CONTENT: Get practical advice on how you can emulate Schaeffler’s success with our “Ultimate Guide to E-Invoicing and Supplier Engagement.” Read it here.

Can you go into a little more detail about your supplier engagement strategy?

We segmented our suppliers by size and transaction volume and aligned our outreach programs accordingly.

For the larger suppliers, where integration is often required, we got in touch directly via our purchasing and logistics function to present the benefits of adopting Tradeshift. Engineering and technical leads from Tradeshift were also present in these conversations.

For smaller suppliers who send invoices through Tradeshift’s self-service UI, we approached them in a series of onboarding ‘waves,’ typically based on country. We had a lot of support from Tradeshift here, organizing and driving dedicated webinars to go through the platform and explain the benefits.

One thing to bear in mind; it’s crucial to have some native speakers available for each country to ensure the message lands with such a diverse audience.

How does Schaeffler quantify success in relation to this project?

Success is reflected from various perspectives. On the qualitative side, we look at the quality of our relationships with suppliers and our ability to collaborate effectively. Today, we have one harmonized process that makes it easy for suppliers to work with us.

When we talk about KPIs, I also look at this as ‘Keep People Inspired.’ Our finance colleagues can now really focus on their key tasks, such as exception handling and driving more automation, rather than spending their days scanning paper invoices.

At a quantitative level, we aim to reduce paper dispatch to less than 6% of our total invoice volume. This is connected to a much higher auto-posting rate and payments in time. This links back to our key qualitative objective around the overall happiness of our suppliers.

What does the future look like for Schaeffler and for this project?

We’re driving more improvement projects together with Tradeshift to create more value for our suppliers, as well as making life easier for them. We also plan to roll out our global e-invoicing program across other regions, including India.

We’re ambitious in our goals. Together with Tradeshift, we want to drive the future of e-invoicing to provide really reasonable value for our partners.