Procurement organisation

In order to execute this vision and specific points for attention as well as possible, it has been decided to, within BAM's decentralised organisational structure, organise the procurement column in accordance with the coordination principle. No choice has been made for either centralised procurement or decentralised procurement. The level at which to pursue strategic procurement processes is determined for each sub-segment. The BAM model can therefore be best qualified as a 'coordinated' approach.

As regards organisational structure, there are roughly three procurement levels within BAM:

  • BAM Strategic Sourcing (BAM Group level)
  • Procurement department at BAM operating company level
  • Procurement department at regional level according to BAM operating company

The relationship between these levels is functional. Hierarchically, the procurement function remains as close as possible to the primary process responsible entities. In terms of its place in the organisational structure, the specific situation of the operating company/region/BU will play a leading role. Procurement positions should be positioned in the organisation with a view to optimising the contribution made to the strategy and objectives of the respective BAM organisational element.

In order to maximise the use of the Group's resources and to continue to realise a continuous line of procurement improvements of primary processes, joint consultation will be pursued between and with:

  • Operating company management and the Executive Board:

Procurement Steering Committee

  • Overarching management of operating company procurement activities:

BAM Procurement Consultation (according to country)

  • Operating company procurement officers:

Operating company procurement consultation

Given that the basic nature of BAM's organisational structure is decentralised and that, despite this, it aims to achieve economies of scale, a deliberate choice in terms of the level of segment, contract and coordination is essential. BAM's decentralised organisational structure clearly impacts the management and organisation of the various procurement processes and positions. The basis is the diagram below, which identifies four levels:

  • Level 1:

Contracts used by various operating companies under the management/responsibility of BAM Strategic Sourcing (for the entire BAM organisation)

  • Level 2:

Operating company-specific contracts used by various regions within these operating companies under the management/responsibility of the operating company Procurement Manager

  • Level 3:

Region-specific contracts used for several projects specifically within these operating company regions under the management/responsibility of the procurement department of the operating company region/BU

  • Level 4:

One-off project contracts under the management of the procurement department of the operating company/BU

The procurement processes should distinguish between:

  • Operational procurement:

ordering, managing projects, follow-up / payment (project-based)

  • Tactical procurement:

specifying, selecting, contracting

  • Strategic procurement:

strategy, policy, objectives, organisational structure, HR

A central feature is a segment/sub-segment-level procurement approach as part of which BAM management takes deliberate choices on the level of coordination and the composition of the segment teams (preferably multi-functional).