Case Peab: Online procurement & Peppol orders

One of the largest construction and civil engineering companies in the Nordics, Peab brings efficiency to internal purchasing with an online store that offers products from the contracted suppliers, as well as order and order confirmation exchange as Peppol orders, EDI, and PDFs with the small suppliers. With the system, Peab employees can purchase anything from office supplies to screws and gravel needed out on the production sites.

This interview with Development Manager Alina Nilander discusses how Peab uses OpusCapita eProcurement and Business Network Purchase-to-Pay solutions to optimize their supply chain collaboration and digitalize all their purchasing.

Peab uses the OpusCapita solutions both in Sweden and Norway across the company’s four business areas; Construction and Civil Engineering, as well as Industry and Product Development. The solution is used both at Peab offices as well as the production sites with a current total of ~2000 users – a number that is about to expand by another 9000 users in the near future.

Online procurement both in-office and on-site

Back in 2016, Peab made a decision to make procurement category-based, but they also wanted a system that supported catalogs, RfQs, smart forms, and more, making OpusCapita an excellent choice for the procurement system.

The rollout started in 2020 in Sweden, and a year later in Norway. “In Sweden, we went from one procurement system to another, whereas in Norway, our employees were not used to having a system, making it a totally different experience. It taught me a lot of patience,” Nilander remembers back. Starting the deployment in the middle of the Covid-19 pandemic, Peab eased it out with an e-learning environment to teach users how to add their project numbers, delivery addresses, etc. “Now, we’ve also started to go out to the production sites, talking to people and getting also their feedback.”

Today, Peab employees buy everything from office supplies to more complicated purchases such as screws, wood, concrete additives, gravel, asphalt, and so on, in the single, company-internal webshop . Further, time-criticality plays an important role; with eProcurement now in place, employees can place orders in Peab’s internal webshop as late as 6 PM with the best supplier, and still get the delivery the following day. “Everybody relies on getting goods very fast, and I don’t think that would be possible without a procurement system”, states Nilander.

One way to make it easier to purchase within given guidelines is to gather all suppliers in one place. “This way, the requisitioners can be certain that they are purchasing from suppliers that have a frame contract, and they are strategically chosen for Peab,” Nilander explains, and continues: “Also, working category-based makes it important to centralize, because you shouldn’t only look at who can offer the same item for the lowest price, but rather at who can offer a best deal in total, looking also, for example, at lead time, environmental aspects, and so on.”

Peppol ordering and beyond

After Peab employees place their orders in the webshop and they go through the needed approvals, the orders then get sent to the suppliers using the Purchase-to-Pay messaging service in OpusCapita Business Network.

“We send orders via Peppol and EDI, and using Peppol is our goal for all orders. It has a very clear benefit: it is a message standard and it can be re-used, making it efficient and quick to set up,” says Nilander. In addition to those, a possibility to send orders as PDF is a must to be able to smoothly work also with the smaller suppliers who haven’t come as far as e-orders in their digitalization journey yet.

However, Nilander emphasizes the importance of going for Peppol: “I do think that Peppol is getting more and more used. A lot of companies also in the construction and civil engineering industries, at least here in Sweden, have woken up and discuss using especially Peppol BEAst as a format.” The used formats also vary from country to country, but Nilander highlights that all these electronic formats eliminate manual errors and speed up the ordering process.

Nilander also brings up the benefit of traceability and ability to link all data, a great benefit that comes with end-to-end digitalization. “We’re able to follow up on our orders. After sending out an order, we receive an order confirmation, and our users also use the goods receipt in the system.” This helps Peab to keep track of who ordered and what, what was delivered and received, and when.

“Users can also see what other users have ordered, so for example, if someone gets sick, colleagues can receive their orders on the production site on their behalf. This way, we can ensure that ordered goods have been received and the invoice actually matches what was received,” Nilander explains, and concludes: “In addition, we use an integration to send the purchasing data over to Peab’s BI Analysis tool for data analysis. It also helps in things such as being more accurate in negotiations when finding new contracted suppliers.”

Future expansion plans

With Sweden and Norway up and running, Peab is now looking into expanding the use of eProcurement and Purchase-to-Pay services also to Finland.

Further, the company is about to activate another 6000 users into eProcurement related to adding a new procurement category: workwear. “These users will only be able to see the limited store view for workwear,” says Nilander, and continues: “At the same time, we activate another 3000 approvers into the system, and they will approve the workwear acquisitions in there before they turn into orders. So, a lot of things are happening right this month, and we’re very excited about it.”

All in all, Nilander finds it’s not the lack of technical capability that is slowing down digitalization today – it’s rather the difficulty for us people in learning away from old ways of working with paper, email and phone calls, into using a digital system. “We want everything in the system to go right, and smoothly, so that our workers out on the construction and production sites can focus on what’s important for them, which is to build things, not to sit in front of computers. So, we want to make the system “invisible”, meaning we want to make using it very easy for them,” Nilander concludes.