Webinar recording: Election, deindustrialization & trade tariffs: Leveraging competitive advantages with 360° supplier management even in uncertain times

High energy costs, strict regulations and uncertain markets make Procurement more complex. Are Excel and ERP still enough to keep an eye on prices, risks and compliance? Many companies struggle with manual processes and a lack of transparency - leaving potential savings untapped.

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With a centralized data basis, intelligent price analyses and AI-supported recommendations, costs can be reduced and well-founded decisions made. But how can this be achieved in practice? Our experts at Tacto show how modern SRM transforms Procurement and makes companies more resilient.

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The current economic situation in Germany presents companies with immense challenges. High energy costs, regulatory burdens and a dwindling industrial base are exacerbating the uncertainties for procurement departments in SMEs. However, with targeted measures and strategic digitalization in Procurement , companies can not only optimize costs, but also strengthen their resilience to economic turbulence.

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In the webinar, Florian Findeis (Product Development at Tacto) and Kendra Benkendorf (Product Development at Tacto) show how this can look in practice.

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Deindustrialization: Creeping decline in industrial production

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Germany is going through a difficult economic phase. Gross domestic product (GDP) fell for the second year in a row in 2024. The manufacturing sector is particularly affected, with orders down 6.3% in December 2024 compared to the previous year. At the same time, unemployment figures are rising, while the Purchasing Managers' Index (PMI) points to a continued contraction in industrial production at 45 points.

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Germany is traditionally regarded as an industrialized nation, but a worrying trend has emerged in recent years. The manufacturing sector's share of total gross value added has fallen from over 25% to less than 19% since the 1990s. There are many reasons for this decline:

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• High energy costs: Energy costs have risen dramatically since the end of Russian gas supplies. Companies in energy-intensive sectors are increasingly relocating their production abroad, where energy prices are significantly cheaper - for example in the USA or China, where they are sometimes only a fifth of German prices

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• Regulatory burdens: Legal requirements such as the Supply Chain Duties Act (LkSG), the Corporate Sustainability Reporting Directive (CSRD) or the upcoming CBAM (Carbon Border Adjustment Mechanism) tariffs require considerable administrative capacities and make it more difficult for German companies to compete

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• International location competition: Countries such as Poland or Hungary offer significantly lower labor costs and bureaucratic simplifications for companies, which is leading to an increasing relocation of production

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• Skills shortage: In industry in particular, there is a lack of specialized workers in areas such as mechanical engineering, electrical engineering and metalworking. Companies have difficulties finding qualified employees and maintaining existing structures

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Economic policy uncertainties after the election

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The recent election in Germany will have far-reaching consequences for the country's economic policy direction. Irrespective of the actual formation of a government, there is already a cross-party consensus on the need for economic reforms:

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• Reducing bureaucracy to ease the burden on companies and speed up approval processes

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• Digitalization to make processes more efficient and increase international competitiveness

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• Combating the shortage of skilled workers through targeted training programs and reforms to the immigration system

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• Promoting research and innovation to support new technologies and sustainable business models

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Despite these positive signals, experts do not expect any economic relief in the short to medium term. Uncertainties about future trade relations, particularly with the USA, and the further development of energy and commodity prices remain. Companies should therefore not wait for political solutions, but take action themselves.

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Study shows: The greatest burden comes from internal structural costs

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A recent study conducted by the Deutsche Schutzvereinigung für Wertpapierbesitz (DSW) in cooperation with the management consultancy Advyce & Company shows that the greatest economic burdens for companies are not caused by external factors, but by internal processes and structural costs. The biggest challenges:

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• Complex organizational structures

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• Low process efficiency

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• Too many manual activities

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• Too little digitization

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This means that companies have it in their own hands to increase their competitiveness by optimizing their internal processes. Digitization offers enormous savings potential, especially in purchasing departments, which are often responsible for 50 to 70 % of total company costs.

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Procurement as a key area for transparency, efficiency and cost optimization

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In uncertain times, Procurement becomes a key lever for companies to ensure financial stability and competitiveness. This includes four key areas:

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• Cost optimization through strategic consolidation of suppliers, dual sourcing and targeted negotiations

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• Risk management to ensure security of supply and identify potential supplier risks at an early stage

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• Quality assurance through structured supplier evaluation and continuous development

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• Compliance management that uses automated processes to ensure that legal requirements are met with minimal effort

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Digitalization as a solution: How an SRM system is transforming Procurement

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Without digital support, most purchasing organizations already have great difficulty creating the necessary transparency regarding suppliers, prices, contract terms and order histories. This not only slows down efficiency, but also prevents the strategic development of purchasing.

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A supplier relationship management system (SRM) can serve as a central platform to bundle all relevant information and optimize purchasing processes:

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• Central management of all supplier data including performance ratings, certificates and compliance status

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• Transparency about price developments in order to develop targeted cost-cutting strategies

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• Automated document management to make processes more efficient and meet regulatory requirements

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• Data-based decision-making through AI-supported analyses that identify price increases or supply risks at an early stage

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ME Mobil Elektronik was able to realize savings of €50,000 within three months by introducing an SRM system. Another example is VEMAG, which was able to save €157,000 on B and C parts with the help of a targeted cost driver analysis.

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A central data basis as a success factor for Procurement

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Many companies fail to digitize their purchasing because they do not have a uniform database. Purchasing data is often distributed across various Excel spreadsheets, ERP systems or local files, which makes effective analysis and control difficult.

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With a standardized database, companies can not only manage their purchasing strategy in a more targeted manner, but also automate processes and increase efficiency.

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SRM as the basis for price analyses and AI-supported optimization

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An SRM system not only lays the foundation for a transparent purchasing organization, but also enables advanced price analyses and AI-supported decision-making. With just a few clicks, detailed comparisons can be created and used directly in supplier negotiations - leading to better conditions and significant cost savings.

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Conclusion

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The challenges facing industrial SMEs are enormous - but companies have numerous levers at their disposal to actively shape their future. Procurement is a decisive factor in this: strategic measures and consistent digitalization can not only reduce costs, but also increase resilience and competitiveness.

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Instead of waiting for political relief, companies should act now - because the greatest burden comes from their own structures, not from external factors. Investing in digital procurement solutions secures short-term savings potential and long-term competitive advantages.

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Outlook

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Political and economic uncertainty is likely to persist in the coming years. Although the rapid formation of a government may lead to more predictability, fundamental economic relief is not to be expected in the short term. Companies should therefore continue to rely on their own initiative and use their Procurement as a strategic instrument with targeted digitalization measures. Now is the best time to position Procurement as a strategic value creation tool - for resilient and future-proof corporate management

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In the live webinar "Election, deindustrialization & trade tariffs: Leveraging competitive advantages with 360° supplier management even in uncertain times", Florian Findeis (Product Development at Tacto) and Kendra Benkendorf (Product Development at Tacto)) show how companies can respond to economic uncertainties with data-driven Procurement . They explain why a central data basis, intelligent price analyses and AI-supported recommendations for action are crucial for reducing costs, identifying risks at an early stage and strategically developing Procurement further.