Evaluate suppliers, develop them strategically and manage them in line with corporate goals
published on
30.11.2023
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🏗 Industry: Chemical industry
🗺 Company headquarters: Hamm (North Rhine-Westphalia)
🧍 Employees: ~ 450 (350 in Germany)
Employees in purchasing: ~ 6
💶 Turnover ~ € 110 million per year
Purchasing volume ~ € 55 million per year
For more than 100 years, Hesse Lignal has been a specialist for intelligent and sustainable coating solutions for trade and industry. With production facilities on site in Hamm and four other internationally oriented locations, Hesse Lignal develops and produces sustainable lacquers and stains for innovative interior surfaces. Prioritizing innovation and sustainability is of particular importance to Hesse in order to position itself optimally and strategically for the future.
"With the support of Tacto, we can devote ourselves to the really important and strategic questions in purchasing, namely 'How do we manage the product groups and suppliers based on our strategic goals?" - Tobias Gaub, Purchasing Manager
The overarching challenge at Hesse Lignal was to transform purchasing, establish it as a strategic value driver for the company and develop it in line with the company's objectives. To tackle this overarching challenge, Tobias Gaub, Head of Purchasing at Hesse Lignal, prioritized two major areas of potential in purchasing. On the one hand, the aim was to establish a professional product group management system and, on the other, to establish an effective supplier management system. However, Hesse Lignal faced major challenges in both areas in terms of process efficiency and data transparency.
In the operational business, it proved difficult to determine the level of expenditure in purchasing and, in the next step, to break down the expenditure into different product groups. It was also a challenge to understand how volumes and sales volumes have changed over time. However, this information is crucial in order to strategically develop product groups, identify and exploit untapped potential in purchasing and thus create a solid basis for professional product group management.
In addition, regulatory requirements increased enormously last year. Major players in the industry began sending out standardized questionnaires to determine their risks under the Supply Chain Act (LkSG). Although Hesse Lignal does not fall directly under the scope of the Supply Chain Act, the company is directly affected by the requirements as a supplier to large companies. As a result, the number of queries that Hesse sends to its suppliers has increased continuously and will continue to do so in the future. With a supplier portfolio of more than 150 active suppliers and only two employees responsible for the supplier portfolio in raw materials purchasing, difficulties have arisen in tracking queries as well as gaps in the queries due to capacity bottlenecks.
In addition, the supplier evaluation process at Hesse proved to be extremely inefficient. The evaluations were carried out using various Excel reports and were therefore associated with system and media disruptions. The process also involved a considerable amount of manual work, which was almost impossible to manage on the purchasing side.
Tobias Gaub wanted to tackle precisely these operational and manual processes in order to gradually transform purchasing into a strategic role. With a material usage ratio of around 50%, Purchasing can have a significant impact on the company's results by positively influencing expenditure. Tobias Gaub therefore had a clear vision: he wanted to establish purchasing as a strategic value driver in order to make an active and positive contribution to the company's results. The first step was to create transparency in the purchasing process and automate all manual and inefficient activities. As a result, the time and capacity gained was to be invested in the strategic orientation of purchasing and in the development of suppliers in line with the defined strategic objectives.
Establishing professional product group management and effective supplier management
Increasing process efficiency and data transparency in purchasing
Create free capacity in the area of purchasing in order to concentrate on the strategic orientation of purchasing
To turn this vision into reality, Tobias Gaub decided to work with Tacto. As a first step, Tobias Gaub attached great importance to intensively examining the topics of process efficiency and data transparency. Successes in these two areas were to serve as the basis for the strategic realignment of purchasing.
By implementing Tacto's Spend Analytics module, Hesse can achieve comprehensive transparency about its purchasing activities in the first step and thus create the basis for professional product group management. All figures, data and facts on suppliers, articles, product groups and requirements can be viewed at the touch of a button. In addition, price trends and price outliers are immediately visible. On this basis, tasks such as price negotiations can be recorded directly and efficiently in the tool based on the analysis results.
In the second step, Tacto Hesse enables complete automation of supplier management. At the touch of a button, all queries are sent to the entire supplier base of 160 suppliers and their status is tracked. By automating almost 100% of this process, Hesse can save 80% of the time previously spent on manually sending and tracking queries.
In addition to automating all supplier queries, Hesse in Tacto can also evaluate suppliers based on various qualitative and quantitative criteria. This makes it possible to evaluate supplier performance at the touch of a button, without having to rely on tedious Excel reports. The use of validated data makes it easier for Hesse to make informed and objective decisions in order to select the best suppliers for their needs and develop them in the long term. This not only increases efficiency in the evaluation process by up to 60%, but also further strengthens the strategic direction of Hesse's purchasing.
The topics of sustainability, innovation and profitability play a particularly important role at Hesse when it comes to suppliers. With the help of Tacto, suppliers can be individually assessed, prioritized and developed in the long term based on their performance, innovation potential and ambitions in terms of sustainability.
"With the support of Tacto, we can devote ourselves to the really important and strategic questions in purchasing, namely 'How do we manage the product groups and suppliers based on our strategic goals?"
By using Tacto, Hesse Lignal can make the two largest areas of potential in purchasing, product group management and supplier management, including all associated processes such as supplier evaluation, more efficient and professional. Tacto thus offers all the prerequisites for aligning purchasing more strategically and in line with the company's overarching objectives.
80% time savings thanks to the digitalization of supplier queries and certificate management as well as the reminder function
60% time savings in the supplier evaluation process
Strategic alignment of purchasing through massive time savings in operational activities
The focus is currently on the topic of supplier evaluation, also against the background of the Supply Chain Act, which Hesse would also like to handle via Tacto.
"I see Tacto as a long-term partner for Hesse in purchasing. Together we can leverage important potential and grow."
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Many thanks to Tobias Gaub and the entire team at Hesse Lignal for our partnership and trustworthy cooperation.
Thanks to partners and customers like you, it is possible to further develop our product in close exchange and close to daily events, as well as to talk in joint webinars about the topics that concern the procurement of industrial medium-sized companies today.
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