The Siemens SCM DigiNetwork brings the virtual world into the real world. The vision: all facets of supplier negotiations, including implementation of negotiating interactions, completed in virtual 3D worlds.
We are all now completely accustomed to practices in our everyday working life – working from home as a matter of course, rarely setting foot in the office, conducting meetings virtually with headset and webcam. That would have been almost inconceivable for many just a few months ago.
There do though remain many areas in which face-to-face meetings are essential for a successful outcome. Supplier negotiations are a case in point: when Siemens Supply Chain Management needs to negotiate prices, the suppliers concerned are ordinarily invited to the negotiating table in person. Sometimes multiple suppliers are invited at the same time on the basis that competition can help to focus minds. Parallel price negotiations are an established strategic approach in procurement. Why are direct talks with business partners so important? “Building trust is a big part of it,” explains Thomas Holzner.
So what happens if a pandemic renders face-to-face talks impossible?
3D working worlds as a means of the future
Good ideas count for even more than usual in the time of a pandemic and it has turned out to be most fortuitous that the SCM DigiNetwork – already known for innovative methods and rapid implementation – had recently begun to investigate this very scenario. The idea adopted was to try modifying virtual 3D working worlds for procurement.
We realized that virtual 3D worlds, which have previously been used largely for training and learning processes, could work very well for procurement too.Soenke Hotsch, SCM DigiNetwork
The idea was soon followed by action. There are now quite a number of providers that simulate the real world with virtual 3D learning and working worlds and human-like avatars.
“We have already been able to test a number of different setups in which suppliers have managed to find their feet. Siemens as negotiating partner moves around from room to room,” explains Daniel Liebkies, SCM DigiNetwork. “We found that it was possible to create a very good atmosphere for the negotiations in this way.”
There have now been several collaboration workshops with suppliers in the virtual 3D environment too. So far these have only been pilot exercises, but the results achieved by the SCM DigiNetwork have been impressive nonetheless.
From the pilot phase to the realization: What next?
The pilot phase, which focuses on organization and collaboration sessions, will continue to be refined. The long-term objective is to move interaction scenarios with suppliers into the virtual 3D world where expedient and to facilitate new scenarios.
It is hoped that the whole of the Siemens procurement organization will eventually be able to use the virtual 3D worlds, but it will first be necessary to select the best providers.
“The procurement function relies on direct contact with suppliers. We want to recreate this contact as realistically as possible in a virtual 3D world. We have successfully trialed a variety of scenarios and continue to learn more about them,” reports Thomas Holzner, founder of the SCM DigiNetwork.
The wellspring of ideas that the SCM DigiNetwork has launched another highly promising project. It will be exciting to see what comes next!
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