Transformation of supplier management:
How a German fibre optic company revolutionized purchasing, IT and rollout with a modular framework agreement.
Table of contents
Introduction
A new, modular general contractor framework agreement enables scalable supplier management and the achievement of growth targets
A leading German fiber optic company was facing a business-critical challenge. The lack of controllability and reliability of its general contractors (GCs) threatened the entire growth strategy. Project-based individual contracts, fluctuating prices and non-transparent project progress made the long-term management of the entire business operation considerably more difficult. The company urgently needed a structured solution to get out of the chaos of individual contracts and establish sustainable, holistic supplier management.
Jonas Schnabel - The expert behind the transformation
Jonas Schnabel is an experienced Executive Partner for critical initiatives. He takes on the management of business-critical programs, task forces and turnaround projects – clearly structured, pragmatically implemented and with a consistent drive towards the goal. His focus is on managing complex programmes, stabilizing crisis situations and accelerating strategic projects. For more decision-making certainty, visible progress and sustainable results. As an honest sparring partner at management level – direct, binding and to the point.
Jonas Schnabel is a trained mechanical engineer and business economist from RWTH Aachen University, trained by former McKinsey partners in consulting and co-founder of seven companies in Germany. He has been working internationally as a consultant and in management positions since 2014 and has broad experience from more than 20 mandates. He has extensive experience in cross-border project and program management as well as the international rollout of strategically important initiatives. He is also a board member of the non-profit organization Digital Dignity e.V. in Berlin, focusing on technology and digital ethics.
Challenges
Difficult starting position for a successful turnaround
The initial situation was characterized by several critical problem areas: general contractors were unable to complete negotiated projects successfully and on time; in particular, the planned activation of house transfer points (HPs) to house connections (HAs) regularly failed or was subject to considerable delays. Individual contracts were concluded for each project, resulting in late renegotiations and cost volatility. To make matters worse, there were sometimes considerable discrepancies between high-level design (HLD) and low-level design (LLD), there was hardly any transparency regarding ongoing projects and there were no incentives for general contractors to quickly convert HPs into HAs.
Particularly problematic: a large management consultancy had previously failed to implement a new, standardized framework agreement. The centralized management with simultaneous integration of all relevant departments and employees simply did not work.
Solution approach & procedure
The right structure and anchoring at CEO level and Transformation Office as the key to success
The transformation began with a comprehensive status quo analysis and systematic categorization of all topics. Responsible departments were identified and directly involved in defining objectives and scheduling. A new governance structure was established to manage the program at the highest level and avoid the failure of the previous consulting initiative.
The initial focus was on the step-by-step definition and finalization of the contract content with the close involvement of all relevant stakeholders and decision-makers. This enabled open points to be dealt with quickly and an initial version of the contract to be drawn up. At the same time, the contract process was used to create transparency regarding implementation gaps in the specialist areas and a clear implementation roadmap was developed.
The first version of the contract was then discussed and negotiated with prioritized JVs. An accompanying training program for departments and JVs was set up to ensure the successful implementation of the new content and procedures. This resulted in a total of three program streams with contract, business implementation and capability building.
Three critical success factors ensured the breakthrough. Anchoring at CEO level with a dedicated MSA task force of internal and external experts ensured daily coordination and weekly SteerCo updates with all C-level stakeholders. Clear process responsibility in the specialist departments through single points of contact (SPoCs) established an ownership mindset for end-to-end processes. Finally, the modular contract structure, clear negotiation processes, standardization and the development of expertise in the specialist departments rounded off the successful approach.
Results & successes
A modular system approach delivers the success that was previously lacking
The transformation was a resounding success: the company developed a completely new, efficient and modular framework contract in German and English that seamlessly integrated all of the company’s business-critical programs. The successful support of the specialist departments in the parallel development and elaboration of new topics and their integration into the contract ensured that all strategic initiatives were aligned.
The signing of contracts with existing and new suppliers marked the start of a new era in supplier management. The start of implementation in the specialist departments was accompanied by coaching for the teams to ensure successful implementation.
The new framework agreement now offers a transparent service catalog with fixed and reduced prices, short order cycles with on-demand call-offs and regional key suppliers with targeted control levers. The company benefits from significantly improved controllability, a close link between payments and project progress as well as stronger incentives for rapid project progress and a flexible response to market changes.
The proven business results, controlled risk management and modular system approach make the MSA a tried-and-tested blueprint for fiber optic providers. This case study impressively demonstrates how a well thought-out transformation strategy, consistent management and structured implementation can successfully overcome even the most complex challenges in supplier management.
Why consultingheads
“Thanks to Jonas Schnabel, a failed approach became a scalable success model.”
Speed and precision. We know that time is often the decisive factor for the success of a project. That’s why we provide you with tailor-made profiles of independent consultants, freelance experts and interim managers within 36 hours – hand-picked and tailored to your specific requirements.
Expertise and international network on-demand. Thanks to our global network of highly qualified consultants with a deep understanding of the industry and a proven track record, we can find exactly the right experts to understand your challenges and tackle them in a targeted manner. This diversity of international experience enables us to staff even complex projects with the necessary cultural and technical expertise – always available and precisely tailored to your requirements. Jonas Schnabel is a perfect example of this: a consultant with experience, expertise and a deep understanding of the requirements of both companies and private equity investors.
Project-based staffing with flexible, hybrid team structures. Instead of relying on permanent teams, consultingheads offers the opportunity to deploy experts from a broad network as required. By combining internal and external resources, we create customized solutions that optimally staff each project phase. This flexibility ensures that precisely the expertise required for the success of a program is integrated – without the restrictions of rigid team structures.
Results-oriented instead of overhead-driven. With consultingheads, companies get access to first-class consulting without the high overheads of traditional consulting firms. Our business model is designed to ensure maximum efficiency – so that your budgets flow directly into implementation and not into costly overhead structures.
Value on personal fit. We not only look at the technical aspects, but also attach particular importance to the personality and working methods of our experts. After all, the success of a project depends largely on how well the team works together.
Results that convince. Just as in this case study, the modular approach was the key to success, we also attach great importance to solutions that deliver immediately measurable results – without detours and with maximum efficiency.
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Whether supplier management, contract architecture or change management: let’s take the next step together – inspired by the successful example of the fiber optics industry.
