There is a growing need for effective strategies in SME Procurement in order to make procurement fit for the future in the face of increasing requirements and growing complexity. Transparency, data access and close collaboration with suppliers and internal teams play a crucial role in this. In the following blog, we summarize the key findings of a webinar in which the topic of product group management was comprehensively examined and valuable insights and solutions for Procurement in SMEs were presented.

Why is product group management crucial?

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A targeted product group strategy can unleash significant savings potential in Procurement . Mr. Sundermann, purchasing expert and Managing Director of "Durchdenken Vorne Consult", pointed out that Procurement has an enormous influence on the company's results. If a saving of just 4% of the purchasing volume is achieved, this has a direct impact on the profit margin and can have a far greater effect on the result compared to sales growth. This is where product group management comes in to create transparency and efficiency through targeted analysis and clear structuring.

However, the implementation of a category strategy should be well thought out. Mr. Sundermann clearly explained that Categories play an important role in Procurement , but that mistakes are often made in their design. Overly detailed or confusing groupings, such as breaking down the "tools" group into many technology-specific subgroups, make strategic procurement unnecessarily difficult and do not create a valuable data basis. Instead, companies should focus on higher-level, purchasing-relevant product group structures that can be used clearly and efficiently for management purposes.

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Key challenges and best practices in product group management

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In Procurement , there are three key challenges in particular that should be considered when creating and implementing a product group strategy:

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1. Create transparency
   Every product group strategy begins with data collection and analysis. Data should be uniformly structured and recorded in full. Even if data quality fluctuates, it is crucial to create transparency about the purchasing volume and supplier structure. Although ERP systems are generally a good source, special tools that can prepare data in a targeted manner and present it in a comprehensible way are recommended. This allows precise statements to be made about dependencies, price developments and supplier quality.
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2. Promoting teamwork
   Mr. Sundermann emphasized the importance of cooperation between strategic and operational Procurement as well as the involvement of specialist departments such as technology or development. Specifications, bundling and long-term demand forecasts can be developed together and then translated into strategic measures. Procurement should see itself as a cross-departmental mediator in order to make well-founded decisions and utilize synergies.
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3. Focus on the right strategies
   A systematic approach based on the analysis of power relationships between Procurement and suppliers provides the basis for selecting the right strategies. The following questions play a central role here: How great is the purchasing power of your own company and what market position does the supplier have? The answer to these questions determines whether, for example, a bundling strategy, cooperation with other companies or a focus on switching suppliers is the right choice.

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Tacto as a supporter in data-driven product group management

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While "Durchdenken Vorne Consult" covered the strategic and analytical side of product group management in the webinar, Caroline Rückhal from Tacto, a provider of digital purchasing and supply chain solutions, presented the company's software solution, which was developed specifically for SMEs. Tacto offers data-driven insights into purchasing processes and thus enables transparent and effective control of product group management. The focus is on user-friendliness and minimal IT effort to make it easy to get started and achieve results quickly.

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Core functions of the Tacto solution:

• Real-timeCategories: A clear dashboard is used to map the development of Categories across time periods and suppliers. Purchasing volumes, price trends and dependencies are visible at the touch of a button and provide a clear basis for decision-making.
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• Strategy implementation: Tasks and measures can be created and managed within the platform. This means that price negotiations or supplier changes resulting from the analysis can be translated directly into specific tasks. The tracking of measures thus remains transparent and can be tracked in a structured manner.
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• Integrated price development and risk management: Price outliers and sudden volume changes for certain suppliers or items can be identified and analyzed in a targeted manner. The tool thus supports not only the preparation of negotiations, but also a long-term price strategy in Procurement.

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This comprehensive support enables medium-sized companies to implement strategic and efficient product group management based on clear key figures and implementation measures.

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Conclusion: The path to successful product group management

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Material group management is an essential discipline that has the potential to realize significant savings and competitive advantages in the Procurement SMEs. The targeted use of analysis tools such as Tacto, combined with a strategic, team-oriented approach, creates the necessary basis for optimizing procurement processes. Companies should regularly review their Categories and manage them in a targeted manner in order to reduce supplier dependencies, save costs and strengthen their own position on the market in the long term.

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Recommendations for successful product group management:

• Improve data quality and carry out regular analyses: Only a complete and up-to-date database enables well-founded decisions and creates transparency.
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• Strengthen teamwork and integrate internal departments: Strategic decisions in Procurement benefit from specialist input from different departments and should be closely coordinated.
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• Implement strategy in a targeted and action-oriented manner: Strategies do not have to be complex. A clear focus on implementation is crucial to ensure long-term success in Procurement .

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Procurement plays a central role in the success and competitiveness of a company. Structured product group management and cooperation with specialized partners such as Tacto are important steps in strengthening this function and positioning the company for the future.

In our webinar "Product group management: those who can analyze have a clear advantage" with Frank Sundermann, Managing Director at Durch Denken Vorne Consult and purchasing expert, and Karoline Rückerl, product expert at Tacto, we will show you how to use digital tools in a targeted manner to implement effective strategic product group management.