Evaluate Suppliers, Develop Them Strategically, and Align Them with Company Goals

Hesse Lignal GmbH

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🏗️   Industry:                          Chemical Industry

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🗺  Headquarters:         Hamm, Germany

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🧍  Employees:                      ~ 450 (350 in Germany)

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🧍  Procurement Team:   ~ 6

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💶  Revenue                                 ~ $120M per year

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💶  Procurement Volume              ~ $60M per year

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For more than 100 years, Hesse Lignal has been a specialist in intelligent and sustainable coating solutions for trade and industry. With production facilities in Hamm and four additional internationally positioned locations, Hesse Lignal develops and manufactures sustainable lacquers and stains for innovative interior surfaces. Prioritizing innovation and sustainability is particularly important for Hesse to position itself optimally and strategically for the future.

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"With Tacto's support, we can focus on the truly important and strategic questions in procurement—namely, 'How do we manage our categories and suppliers in line with our strategic goals?'" - Tobias Gaub, Head of Procurement

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Initial Situation and Challenges

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The overarching challenge at Hesse Lignal was to transform procurement, establish it as a strategic value driver for the company, and develop it in alignment with corporate objectives. To address this challenge, Tobias Gaub, Head of Procurement at Hesse Lignal, prioritized two major areas of potential in procurement. First, the goal was to build a professional category management system, and second, to establish effective supplier management. However, Hesse Lignal faced significant challenges in both areas regarding process efficiency and data transparency.

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In day-to-day operations, it was difficult to determine total procurement spend and then break it down into different categories. Equally challenging was understanding how volume and revenue trends had changed over time. This information is critical for developing categories strategically, identifying and capturing untapped procurement potential, and thus creating a solid foundation for professional category management.

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Additionally, regulatory requirements had increased enormously in recent years. Major industry players began sending standardized questionnaires to assess their risks under supply chain due diligence legislation. Although Hesse Lignal does not fall directly under the scope of these regulations, the company is directly affected as a supplier to large corporations. As a result, the number of compliance queries that Hesse sends to its suppliers has continuously increased. With a supplier portfolio of more than 150 active suppliers and only two team members managing the raw materials supplier portfolio, difficulties arose in tracking queries and gaps appeared due to capacity constraints.

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The supplier evaluation process at Hesse was also extremely inefficient. Evaluations were conducted through various Excel reports, resulting in system and media breaks. The process involved considerable manual effort that was nearly unmanageable for the procurement team.

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Tobias Gaub wanted to address precisely these operational, manually-driven processes to gradually transform procurement into a strategic role. With a materials cost ratio of approximately 50%, procurement can significantly influence company results through positive impact on spending. Tobias Gaub had a clear vision: he aimed to establish procurement as a strategic value driver that actively and positively contributes to the bottom line. The first step was to create transparency over procurement activities and automate all manual and inefficient tasks. The time and capacity freed up would then be invested in the strategic alignment of procurement and advancing supplier development along defined strategic goals.

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3 Needs Hesse Lignal Wanted to Address

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Build professional category management and effective supplier management

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Increase process efficiency and data transparency in procurement

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Free up capacity in procurement to focus on strategic alignment

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‍Tacto as THE Solution

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To turn this vision into reality, Tobias Gaub chose to partner with Tacto. In the first step, Tobias placed great emphasis on addressing process efficiency and data transparency. Successes in these two areas would serve as the foundation for the strategic realignment of procurement.

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Through implementing Tacto's Spend Analytics module, Hesse can first achieve comprehensive transparency over procurement activities and thus create the foundation for professional category management. All facts, data, and figures on suppliers, items, categories, and demand are available at the push of a button. Additionally, price trends and price outliers become immediately visible. Based on this, tasks like price negotiations can be documented directly and efficiently within the tool, building on the analysis results.

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In the second step, Tacto enables Hesse to fully automate supplier management. With just one push of a button, all queries are sent to the entire supplier base of 160 suppliers and their status is tracked. Through the near-100% automation of this process, Hesse saves 80% of the time previously spent on manually sending and tracking queries.

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Beyond automating all supplier queries, Hesse can also use Tacto to evaluate suppliers based on various qualitative and quantitative criteria. This enables supplier performance evaluation at the push of a button, without relying on cumbersome Excel reports. Using validated data makes it easier for Hesse to make informed, objective decisions to select the best suppliers for their needs and develop them over the long term. This not only increases efficiency in the evaluation process by up to 60%, but also further strengthens the strategic direction of Hesse's procurement.

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The topics of sustainability, innovation, and cost-effectiveness play a particularly important role at Hesse when it comes to suppliers. With Tacto, suppliers can be individually evaluated, prioritized, and developed long-term based on their performance, innovation potential, and sustainability ambitions.

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"With Tacto's support, we can focus on the truly important and strategic questions in procurement—namely, 'How do we manage our categories and suppliers in line with our strategic goals?'"

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By using Tacto, Hesse Lignal can manage the two largest areas of potential in procurement—category management and supplier management, including all related processes such as supplier evaluation—more efficiently and professionally. Tacto thus provides all the prerequisites to align procurement more strategically and in line with overarching company goals.

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3 Wins with Tacto:

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80% time savings through digitized supplier queries, certificate management, and automated reminders

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60% time savings in the supplier evaluation process

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Strategic alignment of procurement through massive time savings on operational tasks

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Future Outlook with Tacto

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Currently, the focus is on supplier evaluation, especially in light of supply chain due diligence legislation, which Hesse also plans to manage through Tacto.

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"I see Tacto as a long-term partner for Hesse in procurement. Together, we can unlock important potential and grow."

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Thank you to Tobias Gaub and the entire Hesse Lignal team for our trusted and collaborative partnership.

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Through partners and customers like you, we're able to develop our product in close collaboration and stay connected to the day-to-day realities of procurement, as well as discuss the topics that matter most to mid-market industrial procurement teams in joint webinars.

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Learn how Hesse Lignal uses Tacto to evaluate suppliers without resource overhead, develop them strategically, and align them with company goals.