What Is an ERP System? 

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An ERP system (Enterprise Resource Planning) is software that integrates central business processes such as finance, production, logistics, procurement, and human resources into a unified platform. It enables companies to efficiently manage data, optimize workflows, and improve the flow of information between departments. The goal is to reduce costs, minimize errors, and increase efficiency through the automation and integration of these processes.

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What Is an SRM System?

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An SRM system (Supplier Relationship Management) is software that helps companies efficiently manage and optimize their relationships with suppliers. It provides a central platform to collect, analyze, and monitor all relevant supplier data such as contracts, certifications, prices, and evaluations.

The goal of an SRM system is to improve collaboration with suppliers, automate processes such as procurement and communication, and minimize risks. It enables better transparency, faster decision-making, and helps identify savings potential while ensuring compliance requirements are met.

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Weaknesses of the ERP System in Supplier Management – Why an SRM Is Essential

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In the modern business world, especially in industrial procurement, ERP systems reach their limits. While they are essential for handling operational processes, they cannot adequately support strategic supplier management. Here are the biggest weaknesses of an ERP system that highlight the need for an SRM (Supplier Relationship Management):

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1. Rigid System and Lack of Flexibility
ERP systems are often not flexible enough to make quick adjustments in supplier management. Changes to supplier data or evaluation processes usually require manual intervention, which ties up time and resources.

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2. Point-in-Time Data Capture and Poor Data Preparation
Data once captured in the ERP remains static and offers no real-time insights into supplier performance. This leads to outdated information that increases the risk of suboptimal decisions.

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3. High Lack of Transparency and Poor Traceability
ERP systems often do not provide sufficient transparency regarding price developments, quality evaluations, or on-time delivery performance. This data is usually buried deep within the system, making strategic supplier evaluation difficult.

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4. Manual Integration of QA Metrics
Important quality management KPIs such as complaint rates or defect rates must be manually entered into the system. This increases administrative effort and the risk of errors.

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5. Missing Certificate Management and Document Management
Certificates such as ISO certifications must be manually managed and updated. The lack of automated management leads to delays and increases the risk that certificates are not renewed on time.

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Tacto: More Than Just an SRM

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Holistic Supplier Overview: Tacto provides full transparency with a 360-degree view of all supplier information, including price developments, evaluations, contract details, and key KPIs.

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Efficient Collaboration & Cooperation: Real-time access to all supplier data and automatic QA data integration promote cross-departmental collaboration and increase efficiency through proactive notifications.

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Integrated Compliance and Risk Management: Tacto facilitates the management of compliance data (e.g., CBAM, REACH, LkSG) and supports continuous adaptation to new regulations.

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More Than Just Software: Tacto offers not only a solution but also best practices, direct support, and a strong network of procurement executives.

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Designed for Mid-Sized Companies: Tacto is a comprehensive solution tailored to the needs of mid-sized companies, without the complexity of large-scale systems.

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If you would like to learn more, feel free to download the whitepaper (includes customer references and current market studies).

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In the industrial mid-market, the ERP system (Enterprise Resource Planning) is often the backbone of all central business processes. It forms the foundation for managing resources, finances, production, and logistics. However, companies, particularly in the area of procurement and supplier management, are increasingly reaching the limits of a traditional ERP system. While an ERP efficiently controls operational workflows, the strategic component of supplier management often falls by the wayside. Data is frequently non-transparent or insufficiently prepared, which limits flexibility and agility in procurement.