Merck Optimizes Contractor Management

Bottles of liquid medicine being filled in a factory

Customer Profile

Merck is a leading science and technology company in the fields of healthcare, life science and performance materials. More than 50,000 employees work to further develop technology that enriches and improves people’s lives, ranging from biopharmaceutical treatments, treatment options for cancer and multiple sclerosis, trail-blazing systems for scientific research and production, to liquid crystals for smart phones or LCD televisions. In 2015, Merck generated 12.85 billion euros in 66 countries. Founded in 1668, Merck is the oldest pharmaceutical and chemical company in the world.

Download the Merck case study in PDF

“JAGGAER helps us to control the number of suppliers much more efficiently and to increase the quality of the supplier’s performance.”

Udo Vogler,

Head of Performance Management,

Merck

Challenge

8,000 technical suppliers need to be managed – and that’s just for one location. Merck has been carefully honing its processes for years and they have reached an impressive level of maturity. However, the growing structures have led to different parallel IT systems, increasing the need for higher efficiency and a uniform system.

The challenges in Contractor Management at Merck were reducing manual management and maintenance, increasing transparency and single point of truth for data, modernizing software for the complex environment, optimizing supplier relationships, and improving security status of suppliers.

Solution

Merck has compulsory standards for technical contractors. The Technical Contracting department, in coordination with Group Procurement, is responsible for making sure that these standards are met and adhered to. In addition to meeting specific criteria in order to be approved, suppliers are also evaluated and rated based on their performance. For technical projects in Darmstadt alone, Merck has several thousand suppliers for which a large amount of information must be managed, processed and updated. Today, JAGGAER has taken over many of these tasks. For example, the system suggests suppliers for different commodities and all others are blocked.

User-friendly interface

AGGAER is user-friendly and makes it easy to enter, send, receive and find information. This benefits customers within the company, ie those who are requesting services, and contract management, procurement, plant security, and suppliers. New suppliers can easily apply to Merck online using a registration interface. The JAGGAER application then automatically checks for duplicates. This means that Merck no longer has to update information manually because each supplier is responsible for entering and managing their own data within the system. If important certificates are missing, the supplier can be blocked from new commissions until the required certificates are provided. Merck also hopes that the simplicity of the intuitive system will encourage suppliers to participate actively in the continuing improvement process. This option was not used often enough in the past. Both contractors and Merck employees can now submit their suggestions for efficient processes to improve security or to optimize bills of quantities directly in the JAGGAER platform. This allows Merck to continuously improve their processes.

Central Availability of Data

The whole company can access supplier data using the central platform. The automatic reminder notifications ensure improved data maintenance because the users are reminded to complete certain actions. Data and contractor management is also centrally accessible.