Contract management technology will help the firm speed up delivery and ensure compliance
Richard Humphreys |
This article was originally published in the Autumn 2019 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.
As a global aerospace manufacturer, Airbus has one of the world’s most complex supply chains. The Airbus A380, the largest commercial passenger plane in operation, is made up of about four million parts produced by 1,500 companies in 30 countries around the world.
Like many companies, Airbus is rethinking how it manages its relationships with suppliers. Key to this effort is rethinking the role of contracts in procuring critical parts and services. Historically, contracts have been left for last during the sourcing process, which slows down buying and creates leakage when negotiated terms are not included in the final contract. To address this, Airbus decided to move contracts to the centre of its sourcing effort.
Airbus is at the forefront of a paradigm shift in sourcing, in which buyers use digital contracts housed on a cloud-based contract management platform. By doing this, Airbus is able to leverage artificial intelligence and machine learning to extract maximum value from its sourcing contracts.
The company chose Icertis to spearhead an overhaul of its source-to-contract processes. Airbus will use the Icertis Contract Management (ICM) platform and ICM Sourcing application for direct procurement contracts across its commercial aircraft, helicopters, defence and space divisions.
“As Airbus strives to create a better connected, safer and more prosperous world, we needed a transformative approach to contracting that accelerates business velocity while improving compliance,” said Klaus Richter, chief procurement officer at Airbus. “The ICM platform and ICM Sourcing application will allow us to digitally transform our commercial foundation in the supply chain, ensuring best-in-class supplier evaluation, selection, contracting and collaboration – all while reducing supply chain risk.”
Airbus was impressed with the ease-of-use of both the ICM platform and ICM Sourcing application. With no training, users during the evaluation phase were able to use the platform and app to execute source-to-contract actions. Additionally, its enterprise-wide approach can unify all sales and procurement contracts on a single platform, fostering end-to-end integration and breaking silos. As Airbus works with over 12,000 direct suppliers, the platform’s integrated business processes, spanning sourcing and contract management, and ability to easily integrate with existing procurement systems were also essential.
“As iconic global companies like Airbus look to increase strategic agility through digitisation, having the ability to optimise commercial relationships is essential,” said Samir Bodas, CEO and co-founder of Icertis. “The ICM product portfolio, consisting of the ICM Platform, ICM Apps, and ICM Experiences, does exactly this by enabling businesses to connect their market opportunities with their supply chain more effectively – bridging one of the largest enterprise gaps of the digital age.”