Rising costs and thinning margins are putting industrial procurement under pressure. The greatest lever often remains invisible, because the most significant procurement successes are the costs that never arise in the first place. Yet, in many companies, this proactive cost avoidance is difficult to measure and, consequently, hard to prove.

Christopher Schlörit (Procurement Team Lead at Odenwald Faserplattenwerk GmbH) and Torben Hinrichs (Customer Development at Tacto) demonstrate in this webinar how OWA’s procurement team prevents costs early on rather than reducing them after the fact, and how these successes can finally be quantified. OWA is a building materials manufacturer specializing in mineral fiber ceiling tiles and substructures.

Cost Avoidance: An Underestimated Lever in Procurement

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Cost avoidance and cost reduction are often conflated in procurement, yet they require different approaches. Cost reduction lowers existing costs, while cost avoidance prevents them from occurring at all. Once a cost position is fixed, it is difficult and rarely possible to fully recover it. For OWA, the problem was long-standing: not the work itself, but its visibility. The procurement team was practicing cost avoidance, but could not quantify the success because there was no benchmark and the attribution remained unclear.

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Early Identification of Potential and Risk with the Procurement Brain

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Transparency is the foundation of cost avoidance. Tacto’s Procurement Brain integrates internal procurement data with external market data into a unified database, where prices, volumes, and terms can be analyzed across all product groups. Building on this, the procurement radar continuously scans the data using AI and flags specific insights, such as creeping price hikes, consolidation opportunities, or deviations from producer prices. This makes potential and risks visible before they impact the bottom line.

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Making Avoided Costs Visible with Savings Tracking

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The real turning point for OWA is measurability. With savings tracking, identified potential is monitored through to the realized result, including instances where an impending cost increase was averted. What was once an invisible achievement becomes a verifiable metric that can be presented to management. This transforms cost avoidance from a gut feeling into a demonstrable contribution to the margin.

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Six-Figure Savings in Practice

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Christopher Schlörit illustrates what this looks like in practice using two examples from OWA’s procurement. For mineral wool, an announced price increase in a single-sourcing scenario was significantly reduced. For cardboard packaging, an announced price increase combined with quality issues led to the qualification of a new supplier, resulting in immediate savings. In total, these individual levers have generated six-figure procurement successes.

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Conclusion

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The OWA case study demonstrates that cost avoidance is effective when it is proactive and measurable. The key is to identify price risks early and consistently track avoided costs, transforming quiet procurement work into a verifiable contribution to the bottom line.

Christopher Schlörit (Purchasing Team Lead at OWA) and Torben Hinrichs (Customer Development at Tacto) show how proactive cost avoidance works in industrial procurement. From the data foundation in the Procurement Brain and the early identification of potential and risks, to savings tracking that makes avoided costs visible. Using real-world examples like mineral wool and cardboard packaging, they illustrate how OWA achieves six-figure procurement successes without relying on traditional price discounts.