$157,000 Cost Savings Through Transparency in B- and C-Parts, Volume Contracts & Lot Size Changes

VEMAG Maschinenbau GmbH

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🏗   Industry:                         Mechanical Engineering

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🗺  Headquarters:         Verden (Aller)

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🧍  Employees:                      ⁓ 900 worldwide

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VEMAG Maschinenbau GmbH, Verden/Aller, is one of the world's leading machine builders in the development, production, and distribution of high-quality filling, portioning, forming, and loading systems. The company manufactures its machines and modules exclusively at its Verden location. It produces efficient solutions for craft businesses, mid-sized companies, and industry. Additional offerings include custom engineering and a comprehensive service portfolio. With over 900 employees, the company is active worldwide and achieves an export share of approximately 85%.

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"Tacto's price outlier tool provides excellent transparency into volume and price developments for B- and C-parts. By detecting these anomalous components and the resulting requests for tiered pricing, as well as changes in lot sizes and the partial conclusion of new volume contracts, we expect to save more than $157,000 in 2024." - Florian Greulich, Head of Procurement, VEMAG Maschinenbau

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Requirements

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One of the biggest requirements at VEMAG was the further optimization of various procurement KPIs as well as the further automation of different processes.

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The focus was initially on analyzing B- and C-parts, which are often considered hidden cost drivers. The team led by Florian Greulich, Head of Procurement at VEMAG, analyzed the pricing structures together with Tacto and created more transparency.

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Additionally, it was clarified for which B- and C-parts the conclusion of new volume contracts or the adjustment of lot sizes would make sense. Furthermore, the mechanical engineering company centralized communication with its suppliers, and the demanding onboarding processes were further optimized.

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Digitalization with Tacto

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With the "Procurement 2027" strategy, Florian Greulich placed a central focus on the digitalization of procurement and core procurement processes. The goal is to relieve procurement of operational tasks and focus more on strategic components. Tacto plays a decisive role as the central SRM system.

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As part of the digitalization and the "Procurement 2027" strategy, VEMAG has already made significant progress with the introduction of Tacto as its central SRM system. Over 150 existing suppliers have already been activated via the new onboarding process in Tacto, making all necessary documents and information digitally accessible with just a few clicks. New suppliers are now exclusively onboarded through this efficient process.

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Additionally, VEMAG uncovered significant savings potential with the help of the price outlier tool. Over the course of 2024, savings of over $157,000 are expected to be realized. These savings are primarily concentrated on B- and C-parts that often "fly under the radar" in daily business and can be purchased at better conditions through volume contracts and lot size adjustments.

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Measurable Results with Tacto: $157,000 in Cost Savings & 150 Strategically Important Suppliers Activated in the Tool

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Outlook with Tacto

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Florian Greulich has a clear goal of further expanding and strengthening the partnership with Tacto. In the next step, VEMAG plans to implement the Supply Chain Due Diligence Act (LkSG) as well as connected supplier evaluations (delivery and schedule reliability, quality, etc.) in an automated manner. Here too, VEMAG plans to work closely with Tacto.

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Many thanks to Florian Greulich, Steen Bösche, and the entire team at VEMAG for our collaborative and trusted partnership.

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Through partners and customers like you, it is possible to continuously develop our product in close exchange and close to daily operations, as well as to discuss the topics that concern industrial mid-market procurement in joint webinars.

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Learn how VEMAG is saving $157,000 in 2024 using Tacto.