Case Study TSM / Diehl Controls

800 suppliers on the screen every day:

Diehl Controls relies on preventive supplier management with TSM

More than 9,000 active parts and components from 800 suppliers: what arrives daily at Diehl Controls’ production sites is almost impossible to monitor without good organization and technical assistance. Especially in times of covid lockdowns and bottlenecks in supply chains, supplier management is more important than ever. That’s why the supplier management teams at this manufacturer of electronic components for home appliances rely on Total Supplier Management (TSM) – a methodology developed by Prof. Robert Dust. TSM includes meanwhile a self-learning Artificial Intelligence software. It achieves an excellent hit rate of over 90 percent in predicting supply chain risks. Based on customer data from purchasing, production and logistics, an algorithm calculates trends and forecasts for monitoring supplier performance.

Erich Graf, Vice President Corporate Procurement at Diehl Controls, and Michal Gluszcz, Head of Supplier Development, made a conscious decision to use TSM and the “total” approach. This is because the principle of TSM states: all suppliers are monitored, not just the top 100, and all relevant risks are under observation. These are the “classics” among the KPIs, such as on-time delivery, claim rates, or event-based risks, for example, when a supplier relocates its production site or changes ownership. But TSM can also monitor external risks such as environmental disasters, outbreaks of war such as the recent one in Ukraine, or pandemic-related lockdowns. Here TSM works with external data sources, e.g. from Prewave.

Monitoring of all suppliers with TSM

At Diehl, the changeover began back around 2017. “Before we implemented TSM, we only evaluated 16 percent of our suppliers, and only once a year,” explains Michal Gluszcz. “In addition, there was no exchange between central departments such as logistics, production and purchasing, all of which are affected by supplier performance.” This has changed thoroughly with the introduction of TSM: “We now evaluate all suppliers and we perform a comprehensive data analysis of our critical suppliers every first Monday of the month.” Supplier managers bring together the consolidated data and statistics, as well as the insights gained, in a “TSM Workspace” to make more informed decisions about critical supplier development. However, this evaluation is no longer done only in the purchasing department, but across departments in a steering committee that meets monthly. “This is where all the departments sit together and we look at our supplier base together. Every voice is important,” Gluszcz emphasizes. Diehl Controls is now also going one step further, with the introduction of a Supplier Academy: “We want to train our suppliers to better prepare them for the requirements of Diehl Controls and to better coordinate the processes with each other.” The results are convincing: with the help of the TSM method, Diehl Controls has now initiated and successfully completed 56 projects to develop critical suppliers. The savings from no longer having to deal with complaints, audits and crisis management at suppliers reach several hundred thousand euros – annually! “In addition, we have further developed the processes and significantly strengthened our supplier base,” sums up Purchasing Manager Erich Graf. 800 suppliers and 11,000 preliminary products in view and under control every day – TSM makes it possible.

Preventive risk monitoring

The next step at Diehl Controls is to transfer the relevant supplier data from the company’s own IT tools to the central TSM platform. The TSM software uses watch lists to even better capture trends and forecasts based on data from purchasing, production and logistics. “This enables our customers like Diehl Controls to monitor their supplier performance much better than before in a preventive manner,” says TSM Managing Director Martin Grastat, explaining the principle. Together with Professor Dr. Robert Dust, the founder of Total Supplier Management, he and a team of programmers are constantly developing the software. “TSM enables even better integration of purchasing, logistics and quality management in monitoring the supplier base through the connection and cross-functional exchange of teams.”

Further information

TSM Supply Bridge GmbH
At the chancellery
Rahel-Hirsch-Strasse 10
10557 Berlin
Phone +49 30 74696537-0
info@tsm.berlin

Contact for press inquiries:
Bruno Lukas
Phone +49 30 74696537-1
lukas@gle-berlin.de