Future-proof procurement through data-driven decisions and automation of manual tasks

Challenge:

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For quite some time, the topic of procurement digitization has played a role at ME, so that at the beginning of 2019 ME started looking for a solution for procurement that, on the one hand, transparently displays all numbers, data and facts in a procurement cockpit and, on the other hand, streamlines and digitizes lengthy strategic processes as well as workflows. At that time, ME was using proALPHA as an ERP system, with which it was only possible to process the operative procurement activities on the system side. However, strategic procurement was not supported by the system at all: manual and Excel-based data evaluations, tedious and MS Office-based organizational processes with suppliers as well as complex price evaluations were part of the daily business. For example, it was not possible for ME to make reliable evaluations of articles, suppliers and categories or to view price developments.

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With almost 400 RfQs sent per year, consolidating the quotes and evaluating them was very time-consuming and cost the entire procurement team several days per month. Similarly, ME spent about two to three days a month working with IT to generate data exports from ERP, prepare the data, and analyze it using Excel. It was not uncommon for data errors and inconsistencies to occur, and the evaluations had to be constantly checked and could only generate manageable added value. Especially as a comparatively small procurement organization, with a procurement volume of 10 million € and 5 part-time employees, the entire supplier and document management of the historically grown supplier portfolio with over 400 active suppliers was a challenge that was almost impossible to master. Preparing regular supplier meetings, obtaining supplier self-disclosures, and querying ISO certifications by mail and MS Word dominated daily business and took up about three days per month.

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For these reasons, and especially in times of macroeconomic challenges such as material shortages and rising commodity prices, the desire for system-based procurement support has been strong. However, the search for a procurement software has proved disappointing in many places, characterized by lengthy and costly implementation processes and limited added value. Often, these were isolated solutions that could only partially satisfy the need for software that unites the process and data worlds. Often, only gradual improvements could be achieved after the initial implementation on the one hand, and on the other hand, further adjustments were often necessary with IT support. Employees also struggled with the possible alternatives and longed for an intuitive and user-friendly solution to perform price and data evaluations. For example, the operation of the company-wide data evaluation tool required extensive and intensive programming skills that could not be learned along the way.

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Especially as a growing, small mid-sized company and pioneer in electronic steering systems, ME did not have time for such resource-intensive and lengthy implementations.

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In short, the needs of a medium-sized industrial company were inadequately covered by the established software providers. Not with Tacto.

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3 needs or challenges that ME wanted to overcome

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Create data and output transparency on procurement activities - without IT resources as well as Excel-based and error-prone data analyses

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Automate manual, operational activities in procurement: From supplier onboarding to document management and compliance requests (REACH).

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System-side support, tailored to the needs of a medium-sized industrial company, combining data and process worlds

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Solution

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In the jungle of solutions, ME finally became aware of Tacto - the procurement software for industrial medium-sized companies - through the recommendation of HUBTEX. The positive experiences as well as the first insights quickly convinced ME that Tacto is the solution for digitalization as well as unification of the data and process world in medium-sized industrial procurement.

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"We were particularly impressed by Tacto's philosophy and approach of developing the software close to day-to-day operations and in close exchange with buyers from medium-sized businesses. The opportunity to help shape the software as a customer in a kind of co-innovation is unique."

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Within a very short time after contacting Tacto and only two weeks after providing the data from the ERP, ME was able to transparently track price developments and delivery times in the procurement cockpit. In day-to-day business, Tacto was able to quickly add value and digitize relevant processes, as the software is tailored precisely to the needs of medium-sized industrial procurement and works hand-in-hand with ME's procurement processes.

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"We were particularly impressed by the quick and straightforward implementation, as well as the engagement of the employees from day one. Employees proactively request access to the software and are highly satisfied with its usability."

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Thanks to its intuitive usability, Tacto has become a valued tool in the day-to-day business of employees, as it provides the appropriate evaluations and thus reduces complexity in procurement. Resources that would have been spent on manual evaluations can now be used for strategic procurement, allowing measures to be taken and well-founded decisions to be made. For example, it is easier to prepare for supplier meetings because, among other things, developments in suppliers, delivery times, materials and categories can be tracked directly. The transparent overview of procurement activities in the procurement cockpit, which also shows all price developments and possible savings potential, also allows the sales department to directly calculate price increases for preliminary products. In addition, ME can use the Analytics module as a basis for planning to uncover fluctuating delivery times and unnoticed deviations and improve them in a targeted manner.

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Furthermore, with Tacto, ME was able to significantly improve supplier management as well as supplier relations. For example, buyers can send requests to suppliers with digital forms at the click of a mouse. On the one hand, this makes it possible to invite new suppliers directly via Tacto and to handle the onboarding processes, including supplier self-disclosure, agreements and documents such as ISO certifications. In addition, long-term supplier declarations (LLEs) and essential information on the REACH regulation can be obtained from suppliers and the supplier portfolio can be sustainably aligned and further developed. Mail ping-pong and time-consuming back and forth with suppliers are now history.

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"With Tacto, we have a scalable solution that goes hand-in-hand with our procurement processes and grows with us as a fast-growing medium-sized industrial company. This allows us to say goodbye to error-prone Excel evaluations and lift the company into digitalization. Tacto simply covers all the processes for which we were looking for a solution. 

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3 successes with Tacto:

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With transparency over supplier data and procurement activities, ME was able to reduce preparation time for supplier negotiations by up to 50%. 

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Manual processes such as supplier requests, document management, and supplier onboarding processes in supplier management can be structured and automated, resulting in time savings of up to 50%.

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The interaction of process and data world enables the strengthening of strategic procurement as well as a targeted control of the procurement department

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What does ME particularly appreciate about Tacto?

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"On a personal level, we particularly appreciate the partnership-based collaboration as well as the agility and willingness to respond to our needs. At Tacto, individual customer needs are addressed and we have the opportunity to help shape the product with our ideas and feedback."

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Many thanks to Robin and the entire Mobil Elektronik team for our partnership and trustworthy collaboration. Especially the collaboration in the context of webinars or events of the BME gives us great pleasure! Congratulations again on winning the BME Procurement Excellence Award for medium-sized industrial companies with Tacto as an example of successful digitalization in procurement.

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Through customers and partners like you, it is possible to further develop our product in close exchange and close to the daily business, with the goal of making procurement organizations future-proof. We are already looking forward to further cooperation with you!

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