Transcript for "Your Direct Spend Strategy Wasn't Built for This: Rewiring Procurement for the Next 18 Months": Good afternoon. My name is Mark Schanacker. I wanna welcome you to the, Direct Spend webinar this afternoon. I think we're gonna give it just a few more minutes, just for people to show up. So why don't we give it, you know, maybe two one or two minutes just to give, everyone time to join the webinar. So here we go. So again, this is, hi. My name is Mark. Good afternoon. We're just gonna wait one more minute and, give people a chance to to join the webinar and and get into the get into the system. And we do have a a Ariel has put up a a notice. We have a q and a, so please post questions as we go along. And, we wanna make this as interactive as possible. In fact, we're gonna be asking you some poll questions later. So we wanna get, an idea of what's happening, you know, in your organizations, and then we'll we'll talk about that. So I think we're we're about would minute. say let's kick it off. Right, Mark? Or. you want. We're a minute and a? half. I think that's that's funny. We can you know, anybody who can join can catch up. So this, this session is brought to you by Coupa and KPMG. Today, we wanna talk about your direct spend supply chain and how it wasn't built for this, you know, built for what's happening today in the in the marketplace. And so we wanna rewire procurement in the next eighteen months. So the I take a look here. I'm gonna go to the next. So today, my name is Mark Scheniker. I I head up the direct materials practice at at Coupa. This involves everything from sourcing contracts but really focuses on the supply chain collaboration. My background is, supply chain. For many years, I used to work at SAP for fifteen years. And, today with us, I wanna have our, other speakers introduce themselves. Sven, do you wanna start? Yeah. For sure. Also, warm welcome from my side. My name is Finn Scharfenholm. I'm a senior manager within KPMG within the performance and strategy practice. But simply said, I'm a procurement and supply chain consultant focusing on direct spend and happy to discuss with you in this webinar. So handing over to Stefan. Yeah. Good afternoon from my side as well. Welcome to our joint webinar. We are looking forward to interesting sixty minutes. So Stefan Lechner based, out of Frankfurt in our KPMG office here, working as a partner in the area of, enterprise performance. So like Sven said, focusing on on procurement topics, but also the broader looking into performance and how to increase performance in organizations. And, yeah, we're looking forward to to give you an overview today on on what is happening and, also to to give you some insights on on how you can tackle current challenges. And with that, Mark, if you're fine, then I would set maybe, quickly the scene from our side. So maybe to give you a bit of context and to to start with. So, obviously, we will give you a short overview, more, let's say, on high level. And I think, for those of you looking into the slides already that is shown currently, you will see there's a a lot on. So, basically, for for the context, I mean, what all of us have experienced and seen the last couple of years, let's say, last five to six years, is really, very, very fast development and, let's say, geopolitical topics, but also macroeconomic trends, which are really pressuring, a lot of companies, and and and result in global disruptions. I will not go through all the the the plenty icons and text here on the left side. I think, just looking at 2026, there's there's a were already plenty plenty of events, basically, which, resulted in in in higher pressure on on price and costs, but also in disruptions on supply chain side, currently with the, yeah, the the war the war in the Middle East, basically, with the blockage of the suede of hormuz, earlier as well with with, the developments in in Venezuela as well as the discussions, between The US and China and trade barriers, which resulted then as well in in, restrictions on, material exporters and those kind of things. So, basically, it is, a very dynamic dynamic world. And, obviously, that is, let's say, not only a current shift. It is, not only just about volatility, but it's really a structural shift that we see in the global economic environment since a couple of years. And the frequency of events is is really picking up and, making it challenging for a lot of industries, but companies as well, basically, to to manage all of that. And, we see that procurement and supply chains, going forward and currently, they they are not, let's say, working in a world of isolated risks anymore, but really in a in a permanently disrupted system, basically, where where different challenges occur, at the same time, so in parallel, and then imposing, basically, challenges for the for the organizations on that side. And besides the geopolitics, topics, that you see here and it's, as I said, just an extraction. I mean, we can update the slide on or we're on yeah. Weekly or monthly, basically, with the current speed. But it is only an extraction. And then, you see there in the middle, there's some macro drivers as well, which obviously further add to those kind of, topics which are which are coming up from geopolitical side, like disruptive technologies. I mean, obviously, AI is everywhere. Everything is AI nowadays, as we as we learn each and every day, even if it's not maybe really AI in the background. But it is a disruptive technology for sure. We see then regulations in in many markets that are, let's say, putting additional requirements for documentation, but also for decision making onto organization. We have security concerns. It's not only physical security, but, obviously, it's also cyber risks that are, let's say, challenging and, they're putting a lot of, cost pressure on many organizations because in order to defeat them or yeah. Build resilient, architecture for cyber risk, obviously, it's all associated with cost as well. Climate change and all of that, basically. So a lot of, topic that adds, basically to those. And the result of that, and that's what you see on the on the right side, is basically, I mean, four major topics. I mean, it's not not all, but, one of them is obviously cost increase and cost pressure, which we see in many industries, for for, let's say, raw materials, for for components, with with tariffs as well, obviously, which have been a topic, since two years now or one and a half years. Then, basically, you have not only the the cost pressure, but you have the planning uncertainty that comes as well, basically, where it is challenging and requires good forecasting and planning data, and that's one of the topics we want to tackle later, in order to to, address those kind of uncertainty in the on the planning side. We have supply bottlenecks. I think I don't need to add too much to that because that is a is a topic that we see in the media now every day, every other day, basically. So that is a is a critical topic. And, obviously, the competitiveness that increases in in many markets with, I think many of you have read that that with the new Chinese strategy as well, to rather, obviously, produce more and export more and drive that with low cost and local substitutions into global markets. That is one of the aspects, obviously, where competitiveness, and we see it in in the automotive industry, for example, really, is is further picking up. And, with that, obviously, it is a lot of challenges for procurement and, supply chain organizations. And, that's why we said it's it's a good timing as well to to look into those topics and give you some insights from our perspective from both, let's say, functional point of view, what we see in the industry, but also, how we, help clients addressing that as well as how Coupa can, tackle that basically with with technologies that support, for example, decision making. And, three key messages maybe that stand out here is that, for procurement, obviously, the traditional views of procurement focusing on being efficient, generating savings for the organization that has in many in many organization reached already their their limits. So this efficiency driven, let's say, purpose is not enough anymore, but it is really, as well, let's say, on on the limits and needs further further, let's say, push from from different areas and, with different tools as well. Then basically, we have, obviously, the challenge that we have multiple or often called multi crisis as well, so that we have, not only, let's say, further performance expectations, so the whole company is looking towards procurement and supply chain, to to build a resilient organization, but also that we, have, at the same time, the complexity and that's what you see on the left side basically exploding. So which obviously creates, further frictions as well and and further tensions. And the last one is that procurement organizations with all the decisions that they they help making within companies, there's a lot of risk as you see I did with that. And it's not only, let's say, risk in a in a sense of, like like earlier, that there there might be might be issues with quality or those kind of things, but it has massively increased because decisions on supply chain, obviously. And, the awarding decisions can have a massive impact on day to day operations today looking on the disruptions that we see. So that kind of just as a high level overview so that's, the the key takeaway. The global disruptions, they are not, let's say, a temporary thing, but are out of accepted for longer periods and a new baseline. And, obviously, that requires procurement as well to update procurement strategies, but also then following target operating model and tools and everything, else. So, Stefan, I have one question. I mean, I know. all. three of us. Yeah. We work with supply chains. You know, we see across, you know, many different customers and many different supply chains. What do you what do you think, you know, obviously, the the number of of events or the volatility has certainly been increasing. What do you think is the one, type of volatility that has caught people the most off guard, you know, the most unprepared? Yeah. I think in many many industries and for many customers that we have seen, it is really the the supply chain resilience, so that the I mean, there's just on the timeline that you see on the left side, there's multiple events, obviously, would have impacts on supply chain starting with COVID, then starting with the with the Ukraine war as well. And all of them have different components, for different industries as well, so semiconductors and all of that stuff. And we we we see that further developing. So it is really the resilience in the in the supply chains that, and the availability of parts that pressures many companies that we see at the moment. K. And, obviously, if there's questions in the in the q and a, feel free as well to raise them. Going forward, one one slide as well. And it's it's just a last high level overview before I will hand over to Sven to go a bit more detail on the planning side as well and those kind of, details. I mean, we we just rated here, basically, let's say, the the implications that those kind of changes raise and, that bring them, to different, parts of the organization. It's not obviously only procurement and supply chain. It affects, other functions as well. But focusing here on procurement and supply chain, basically, so you see on the left side and the size of the bubbles basically indicates how much of an implication there is, basically. Technology, I don't think I have to to add too much to that. Obviously, it's a key driver. We see organizations, as I said earlier, striving a lot on AI. At the same time, it creates additional costs, tools strategy becomes important to find really the value out of technology and how to address topics, with with different solutions and what it adds for the company. But, also, obviously, there's all discussions in the background, not only on the technology to use, but also the access to technology and data. So it becomes, then again geopolitics, more and more important on where, let's say, data is hosted, how data is available, how how secure data is, basically, as I said earlier about cybersecurity risk as well. And and that matches then or meets then at the same time as well that, obviously, it needs good data pieces. So a lot of customers are in a in a phase where they they even more see now that data, consistency and data availability is a key thing in order actually to be even using AI on that. Then on the the on the right side, so the global supply chains, as I said, more fragile, that, requires more planning and more network optimization, basically. So to really, plan as well before wordings into what kind of scenarios are available, how that can impact the supply chains, how that impact certain countries and the the plants within it or the the, entities basically within it. And that is not only driven, as I said earlier, via via cost pressure, but also really via resilience in order to ensure stability to absorb shock, shocks basically as well, and and make sure that the the company and, the production, for example, can absorb shocks. On the right side, you see the bubbles get a bit smaller, so that will be a bit shorter, obviously, is that the the infrastructure and raw material, basically, that is, a topic in many industries to to have the availability for those. And then especially in Europe, a lot of regulations as well that put further, let's say, activities and, pressure on on organizations in order to fulfill, for example, reporting requirements in the ESG context. And that all needs and, it is the smallest bubble bubble here from the implication side on the on the slide, But that all means as well that obviously, labor and and cultural, aspects. So decreasing workforce, as well, with higher automation, ensuring the shift from from, let's say, yeah, to partially very manual process into automated process and all of that basically, has implications on procurement and supply chain. So, it is obviously a challenging, environment, but also on the positive side, it is an environment where a lot of stuff can be done and created and defined now, for further strategy. And, I think with that, maybe Sven, I will hand over to you in order to get a bit more into into details on the next slide. Absolutely. Thank you, Stefan. And, as you said, we are in a dynamic world. Right? We have a lot of uncertainty. And, therefore, I wanna touch base with you on two topics, basically. The first topic is, discussing with you on resilience, so you can increase the resilience. And the other topic is, as Stefan said, let's talk about planning, how we can build a better planning to be more resilient. So, basically, what we're discussing is everything every time about secure of supply, right, and procurement, and on the other hand, the cost perspective. And therefore, if we talk about resilience and all these dynamics, I wanna guide you through a bit of a a framework, how we would, address those topic topics to make your supply chain more resilient. And therefore, the first part, of that is definitely the topic you need to have the a good baseline. Right? If I talk about the baseline, it's a it's a it's a great supplier's analysis, which you need to ensure. Right? You need to understand the structure of your supplier. Right? How is the end tier of the supplier? Where is the supplier located? How does, the bill of material, on the supplier side look like? So you need to understand that. And how you can do that basically is, of course, by engaging more active, with the, supplier, enhancing communication, but also ensuring that regulatory obligations will be placed into the contract. So you get the relevant information soon. So once you have that baseline, right, you need, to build the resilience score. And you build it by three pillars, so to speak. On the one hand side, looking backwards, looking on the current state, and looking on future scenarios. And let me guide you through this resilience score metric which we set up. Right? It's about, first of all, it's the supplier evaluation. I would guess most of you have that in place. Right? You you look at the performance of the supplier and you look at the performance on the cost quality, but also from an on time delivery perspective on that supplier. And, of course, you add by interviews the different perspective from, the demand holders. So you have an understanding how the performance of the supplier was in the past. Now you need to understand the different Brazilian factors. What does this mean? Right? You need to add the risk drivers in your current supply chain, which you see and add this to the supplier evaluation. You need not to understand that your supply chain broke. You need to understand why the supply chain has broken and what are, the measures which, which are derived from that and what kind of measures did, force that issue. And then that is the current state. And then is the the next question to look ahead. Right? And then we're coming more to scenario planning perspective. What does this mean? You need to think about the different, triggers. Right? We have a lot of geopolitical, geostrategic events, which we see these as triggers. And you need to understand how does those scenarios and what kind of, scenarios you have, how does that impact your supply network? And then you need to, classically like to do it in risk management. You need to understand the impact, but also the probability of occurrence. And bringing these three pillars together, you get a resilience score. Right? You understand from the past, from the current view, and from the future view what can happen, what, what happened, and so you now can derive the right measures. Right? You have a good baseline of understanding per supplier what are the different, issues that could cause. And now you derive the right measures. Right? You derive, measures per supplier. In certain cases, you combine those massive measures across your supply chain and build an implementation roadmap to ensure the resilience. But what is, of course, important, as I said at the beginning, right, you need to balance secure supply and cost. You need to ensure that you take a look on working capital, cash flow, and EBITDA impacts so you directly combine it with a financial view. So that's basically how we can give you a bit of a framework, how you could guide through your supplier basis and through your supply chain, what are these, critical factors and what kind of measures you need to derive. And I said, that's the first part. Looking on resilience to give you a bit of, a glimpse on the framework. And the second part is, planning is very important. Right? We say, as Stephan said at the beginning, right, there are sudden events breaking down your supply chain. And when the supply chain breaks, right, what keeps your operations at least running smooth? It's about planning. And therefore, sales and operation planning is a very, very, very good, method and and important processes which you need to have in place. And therefore, you need to understand how is the market demand balance it with your capacity and understand how you in, how you at least can ensure that you satisfy the demand of your customers. And how you should do that? Let's, pick up that on the next slide, and therefore, I have also brought with me a little framework, yeah, which I would like to guide you through. So first of all, everything starts with the sales planning. Right? You need to have a proper demand planning in place. So you have a sales plan, which is at least the next twelve to twenty five months on a good shape and have a good forecast. You combine this, of course, by using, statistical predictions and adding, artificial intelligence machine learning so that your algorithms get better and your forecast occurs to get better. Once you have the sales plan in place, right, you need to break that down. You need to break that down, by bill of materials, by routing plans so you get the production plan. You get the supply, demand you have, and you bring it bring it together with your capacity. So you gain, in the second step, transparency about your, demand and your capacity and where you, have the gaps. To make now good decisions, it's important to combine this with with financial data. Right? You need to add to each and every, information and, the financial data aspects so you can, take it ahead and can take good decisions. And once you understand where your supply chain breaks, where you cannot satisfy demands, and where you have the bottlenecks, and you understand how does this combine to your financial planning, you can now go into a scenario. So you go, and, this, outline the different scenarios which you could serve. And by having that, financial data, you can outline the right business cases, and you have robust business cases to take decisions. And then the fifth step, in in this approach is definitely the executive sales and operations planning, where you bring all the leaderships from the different functions together. You have a validates scenario planning in place, and then you can derive the right, the right decisions by having clear facts and figures on the table. And what is important, you have the right leadership in place, which can take the decisions by, looking at the different perspectives. So just as a rough understanding, if we all see about these, geopolitical and, geostrategic issues, we see you need to keep, the planning up and running, but also resilience is one of the critical factors. And I would say, Mark, handing over to you, let's get into the discussions with the audience, about about their topics. Mark, handing. over. Thanks, Sven. Thanks, Stefan. Absolutely fantastic. Right? I mean, the, you know, the identification of volatility, you're looking at how to address that. You're using standardization, creating predictability, and really changing the the supply chain. So I wanna go to, whoops, the polls tab. Right? And I wanna share a oh, here we are. Okay. So what and what we wanna do is wanna ask you, what are you doing today? And and really get the audience to to basically say because, I mean, it's one thing to listen to, you know, kind of what we've been through, you know, some of the networks that we've been working on, but but you're here today, right, this afternoon, and we wanna understand, you know, what you do. So first, when modeling your supply chain network, your resilience, what what do you think is the most important input for your company? So we have four options. You can see kind of in real time the number of votes coming in. First would be, you know, geography and risk exposure. Second, lead time variability, you know, across the different nodes in the network. Third, oops, demand volatility and forecast accuracy. Forecast is always a a tough and then or and my main favorite, of course, is that the intern whoops. Can I go back? Mario, how do I get back to there we go. So or whatever the intern pulled from that one spreadsheet last Tuesday. Okay. So we have, we have a really it's pretty amazing. I mean, the preponderance of votes here, the strong vote is the supplier geography concentration and risk exposure. And, you know, this is fascinating to me. I think it's you know, part of it is, you know, hey. In the EU, the conflicts that are happening in this region okay. Wait a minute. Who pulled out the intern? I I mean, I okay. We need a comment. Who has the intern producing the spreadsheet? And that's that's just, okay. Thanks for that. You've just made my whole day. So but we know that, you know, the geography, you know, the the concentration, especially because some of the things that have come up with tariffs, at least, you know, for me, you know, with this, you know, with the chaos that we get here around tariffs, you know, country of origin has become critical for us. And, it's not something you know, we we went after basically lowest cost. You know, we're always looking for the best pricing, you know, and we'll search the globe. And now it seems like I don't have that option. I'm being directed by a government, you know, to only buy in certain places. So, Stefan, what have you seen out there? Is is this something that resonates with you? Yeah. Definitely. I mean, obviously, the, let's say, the supply chain structure and the transparency basically is is one thing. And, obviously, the the first answer reflects partially on that as well. So to understand, first of all, where are your dependencies? So from which suppliers and which regions? What kind of countries, those suppliers are located in? Do you and I think what's mentioned is is critical as well. Like, for every risk management and I mean, we are big four companies. So for for us, always there's a lot of risks in in in our, let's say, considerations. But on the other hand, it's about probability as well. Right? I mean, it doesn't make sense now to to build up stocks, in in areas where we say that it's it's just cost, but it doesn't add really to the to the resilience because you don't see any any potential risk there. Obviously, then looking from the initial data into the regional concentration, basically. So where you see, okay, if there's local disruptions for whatever reasons. I mean, we are talking about a lot of as a human made topics at the moment, but, obviously, there's also disasters, which you never can predict, which can impose risks for supply chains. So there's there's a lot of different, external factors as well that that can occur. But I think that that is critical. And then, obviously, to look as well into how you can diversify without, obviously, generating, let's say, an an an over cost model at the end, as well because, obviously, it has to balance the the risk and the cost as as Svend mentioned as well. So I think, the interim was removed now, but I think, if you have an interim doing that only, that might not be sufficient. So, obviously, that requires a lot of data as well, and that is, required to get just the overview. And then, I think some mentioned here the demand volatility as well. In order to move into that direction, first, you have the transparency, on the data side in order to be able to make those kind of scenario planning and decisions, basically. Yeah. Maybe adding to that, yeah, Stefan, I think, you're fully right. And especially when it comes to supply geographic, it's it's all about the entire supply chain. Right? You can build up dual sources, within your direct, direct spend. Nevertheless, once it, drills down, the supply chain, right, it comes to the same supplier who has the issue, right, and your supply chain breaks. So, therefore, I think this has changed. And, if you would ask me, I would say two years ago, the demand volatility and and forecasting currency was much more important because we saw we moved from a let me say from a buyer market in a in a seller market again. Right? We have, not unconstrained, limitation at our suppliers, which we which we recognized. But I think this has been solved quite good through planning already and therefore seeing now all these geopolitical events. Right? We really understand how the different, yeah, how the different, dots connect which is which is other between You know, I this one, I gotta kinda add on to that spend. This one. really surprised me because I I thought it was demand volatility and forecast accuracy. In other words, we we can't get our forecast right, you know, which means that we kinda whipsaw our suppliers around. And, you know, I can't create a resilient network because the suppliers don't believe what I'm telling them. Right? Now, you know, you guys went through, you know, the really the rigor of a sales and operations planning process. Right? And it sounds like from our audience, you know, from the people that are on today, that they're doing pretty good or at least that's not really the number one concern. The The number one concern is really that geographic concentration. You know, where where where is my supply? You know, where is that supply? Which factories are they are they feeding? Right? And what is my risk exposure? Because I think part of it is unpredictable tariffs. Certainly, the conflicts, you know, can I get, you know, parts through the Strait of home homes? Right? And that's every morning. You know? We're we're all, you know, on the edge of our seats wondering, you know, are we really going to to bring this back down to a more stable, you know, planet? And and that affects our supply chain. So I think this, is partially a reflection of current events, but I also think that this is something that's telling us we're better at supply and up or, SNLP than we have been in the past. What do you think? Yeah. I think, you're right. I mean, we saw a lot of clients investing also in sales and operation planning or integrated business planning over the last last year. Nevertheless, I would say at least from from what I see in the market, right, the the the we are still far far away from very good forecasting perspective. And then the different. breakdowns to, to the supply, that is still, still something which is not running running that smooth, especially when when it comes to rolling forecast. Right? So, Yeah. you do once a year, say it's an operational a sales plan. Right? You need to force at least the, yeah, the the the the the, sales part, right, to bring sales plan rolling forward. Right? Every every month, you need to get a new forecast, etcetera. Yeah. Yeah. Yeah. Maybe, Mark, just just one point maybe to add to that, and then maybe we move into the into the next question as well to to to get some further insights from the audience as well. I think, important point that you made, I mean, and and as Sven added to that, I think, I mean, just looking at the the current, crisis in The Middle East, obviously, we we see now the first impacts, obviously, but, forecasting in many industries will anticipate that, six to nine months down the stretch, then we will see much much heavier impacts in across different in these industries because fertilizers cannot be produced. You have issues with with certain gases that are required in many industries as well. So it is now the time actually to run those processes, because going forward, the the challenge will come from this single crisis, in in a couple of months for many industries, again, so to say if they if they're not only hit by the energy prices now. And we we don't know what kind of other crisis we have will have at this time. So as you said, there might be now a single event, but that actually impacts already the forecast and planning cycle. And, obviously, there there's more events to come for sure. So, yeah, I think that's terrific. I you know, part of, what I took away from this oops. I can go ahead and and share this next one. So this, you know, we talked about this very begin in the beginning, Stefan. I asked, you know, what you saw. And, so what I wanna ask the audience is, you know, which one of these, has impacted your supply chain in the past twenty four months? And I would, you know, kinda pick the one that basically has had the you where you've had the most difficulty. Right? And, I can see, yeah, the tariffs and trade, we don't you know, we kind of expect that. But the the part that, we brought up, you know, basically, it's around, you know, how do you make the supply chain resilient? You know? So we we got out there and we said, hey. We'll we'll start dual sourcing and, you know, make sure that we don't have any sole source components. We'll get a second source of supply. And then, you know, the dimension that I think we kinda missed was that second source of supply, if I if the first one's coming from Taiwan, the second one can't come from Taiwan. Right? We need it to come from a different geography, a different place. And we understand, obviously, the landed cost because, you know, the the shipping, you know, besides, you know, just tariffs, right, but also the shipping costs or potential for, another conflict. Right? I mean, that's certainly an area where we have some tension. So, let's take a look. We've got a few votes in, and I'm this is pretty interesting. It's trade you know, tariffs and trade, which, you know, here in in my part of the world, we talk about tariffs every day. And, you know, the it's gets turned into a weapon for a politician rather than something that's really kind of more of a, you know, something to be worked on elegantly in the deploy you know, diplomatic or in diplomacy type of means. And it's certainly been very upsetting for, people in in The United States. I will tell you that. That, but the big announcement this morning is that they're refunding tariffs back to the companies that had to pay them because they were illegally put in place, you know, by the president of The United States. So, that's actually now shifted. So all of a sudden, you know, the courts weigh in and say, you know what? You can't you you can't put these tariffs. You know, you can't even unilateral. Basically, there's laws in place. And now he's giving the money back, which is now swinging back. Hey. I can do something different with my supply chain. So, what do you guys think? Is it tariffs, or do you think the the increased price in commodities? And I'm not just talking about oil and gas. Because, you know, when oil goes up, resin goes up. And when resin goes up, everything that's plastic, right, which, you know, is everything we buy has some kind of plastics, at least some packaging. Right? So what are your what are your thoughts on these, on on what what you're seeing here from our audience? Maybe maybe let me let me pick up the topic about the the the tariffs and trade policies because I think, why it's mentioned, it it showed the procurement departments and and the companies that they have less transparency where, the tariffs sits, right, and how it impacts the supply chain. Right? The first thing we saw when we, talked a lot about with our clients about the tariffs and and so on and so forth. Right? The first thing was all about getting transparency because, you know, you shipped the, the goods from China to Europe. Right? And, tariffs were in place, and, you know, you have a lead time of, weeks and months, and you see, the you you could not hinder it. Right? You need first to understand where is your goods. Right? How does it impact? And and that's what we saw, was quite showing, the the the companies that they don't have so much, transparency about it. So the so I can see that there was a lot of discussions, on that part. Maybe, Stefan, do you wanna add something? Yeah. I think, I mean, I agree as as well, Mark, as you said. I mean, obviously, maybe always different perspectives on what kind of drives those tariff discussions, at the moment. I think it might have been in, let's say, a a more topic some some, some some, let's say, months back, so to say, or what the focus was stronger. On the other hand, I mean, obviously, that topic didn't move away. It's just like the attention moved away from it. Right? It it is still in the background that I recently had a discussion with with a large OEM in in Germany on on the tariff team is this specifically with with them. And it's it's incredible what they what they they shared a bit on their journey, what they had to build in the last couple of, let's say, two two and a half years, basically, how the team size increased and how much work they spent on topics, which. never realized at the end. Right? Because there's a lot of discussions and chatter and, obviously, with with a linked work, a a a world, basically, and supply chains. A lot of those those customers need to prepare. Obviously, you cannot move production, easily out of of one country into another country. In automotive, you have to supply a network around and all those dependencies you have, especially if you just look on North America, but even in Europe, parts crossing borders, then let's say another supply chain step is is based, on this part, then it moves back into into the production side. And, it it's just incredible on on how much cost it it just generates internally as well to address all of those topics and to prepare that. And I think that is important and think that we we we need to to underline that and keep that in mind. It's not only always a procurement topic. Right? Procurement is just one tiny piece in the whole in the whole chain there. Obviously, there's logistics involved, especially for for tariffs. You have linkage with with, yeah, with tax departments and, finance departments and a lot of internal functions as well. So it really, requires as well the expertise to to be pulled together. If we look at it now, I I think from from from our perspective, it is geopolitical conflicts as well. But moving here into inflation and commodity price swings, I think, which the audience feels as well, as as challenges. So that is definitely that's something that we see everywhere. So basically increasing, yeah, basically, costs for for, for energy and so going into productions, but also for parts. Then obviously, short notice changes on prices, which require then, let's say, a strong management as well, on on those costs, and basically, also to to and then we are the demand side again as well to to evaluate on how much of the costs you actually can pass on to to your to your customers at the end as well regardless if it's b to b or b to c, because some of those those, raw materials or components really are are are crucial. So I think that is something, and I think that the audience, underlined it as well. It's not only the past twenty four months, but it will be the the the months to come, so to say, or the next twelve months as well, where especially this topic, yeah, will will will be further important and anticipated. And, I said that, yeah, that needs to be managed. Somehow, obviously, you cannot anticipate all the risk and manage all, on all possibilities. But, obviously, there's certain tools as well that you can use in in contracts on, using index pricing or not, in certain areas as well. So there's potential, obviously, as well to to to, get a bit ahead of that at least. And, I think that's where the the upfront planning and the forecast collaboration and those kind of aspects come into into play. K. So we're seeing this, you know, tariffs, conflicts, you know, inflation. So let's take a look at, you know, kind of, like, what what are you what are you going to do about it? Right? I mean, it's happening. Part of it, you know, certainly, Stephon, I've seen this. Right? The teams have gotten a lot bigger. Right? They're working on landed cost. They're, you know, trying to put you know, doing a lot more, scenarios, you know, to say, okay. What if? Right? So for for the audience out there, what is the scenario that you are are really putting into into the forefront saying, what is it that we need to start modeling, especially if you haven't, given it other anything other than just light, you know, treatment before? Because, you know, for me, I was you know, we were looking at supplier risk. You know, do they have legislative risk? You know, do they have ESG risk? Do they have maybe a financial, you know, malfeasance, you know, so the CEO, you know, changed the books or something. I mean so, this is, one, you know, that that I think is is really kinda like, okay. So what action can we take? Right? So one, certainly, you know, I'm oh, yeah. So if we take a look at at some of the answers here, you know, sudden tariffs, and let me tell you, they were sudden. Right? The tariffs that we saw here, I can't tell you, how shocked people were that The United States, put these huge tariffs on on Canada. It was on it was baffling, you know, to the to the average citizen here, and not something that we that anybody was planning on or or modeling. And, you know, certainly, second, I think this one is is definitely, you know, regional conflicts. It just seems like there's no end. Right? There's no end to the conflicts, you know, whether it's Ukraine, The Middle East. You know, we're now they're talking about, you know, conflicts in in, Southeast Asia. And then the third one, which is one that we've really focused on, you know, I've seen more in the past, which was I'm just doing a risk assessment. You know, we talked about that, you know, earlier, this afternoon that, you know, measuring risk is just a a standard good practice, you know, one of the best practices. You have to take that into account. But, and I think people have. So so I really think this is very reflective of the reason we only have one vote is that because people have been measuring risk, but the tariffs and regional conflicts in my mind are things that, you know, we have to model now. So what what do you think, Sven? Yeah. Definitely. I mean, we see all the conflicts, across, across the globe. And, if we talk to to our customers, they definitely are asking how it's impacting. So let's let's take the conflict in in Middle East at the moment. So So everyone is asking, how is this impacting my supply chain? Right? And this. is, on the one hand side, how can I secure my supply, but also what is the financial impact on that? Right? So, what is the the EBIT impact? Right? How is the commodity increase? So, therefore, I think that is quite crucial that we get more transparency, on that one because, as we see, geopolitical tension is coming up more, and we need to understand if we have, certain events, yeah, how it is impacting. Yeah. And maybe just just a remark to that, obviously, I mean, in the past, a lot of industries, they they have optimized supply chains, talking about things like, obviously, just in time production, all of that stuff. And, obviously, that that makes it even more fragile now for any for any disruptions. Right? So, we we see, obviously, that with the reason I mean, I'm not talking about now, just Middle East, but also last couple of years with with all the other events that that happened, starting as well. Yeah. The the blockage of the the sewage channel as well, basically, which which was quite, let's say, an an an yeah. An unpredicted event, but impacted a lot of industries as well, at least on the on the on short notice. So I think, obviously, a lot of companies with the with the planning, possibilities that they have and, with the data that is available today, if it's it's probably used, then basically, obviously, you you can start planning as well on on certain components if you if you start up, I don't know, building smaller stocks, change, let's say, roots as well or having different kind of, logistics as well in the background. But also up to up to, yeah, seeing and reallocating maybe potential parts from from a certain, facility to another one. So those kind of things, obviously, that that are are critical. Will will you be able to to manage each and everything? Obviously, not Right? There's there's certain unpredictability, but the scenario and scenario planning helps you for sure in order to to, basically have some some, options prepared and and working on some of those options in order then to to have answers that help you at least, Yeah. softening the impacts as well on the on, the company. you know, people actually starting to evaluate these scenarios. So, with we have about five minutes left, and I just wanted to, take and and kinda kind of, you know, put this all together, you know, what what we have. You know? So first is, you know, kinda navigating demand volatility, and this is, you know, modeling that supply chain. We've talked about it, creating the scenarios that say, hey. What if, you know, we have another conflict? What if we have an additional unexpected tariff? Or just, you know, basically, regional conflicts in terms of of of just policy, you know, between two companies. Second, you know, now that you've modeled that scenario, how do you absorb that shock? You know? So if you haven't the unexpected, you know, and and we haven't even brought up the environment, you know, the tsunami that hit in Japan. I had a fire in, Canada that really affected one of my supply chains. It was it was terrible. Right? But, you know, how do we we take and absorb those shocks with really tight, you know, alignment and collaboration with our suppliers and and really creating, you know, multiple, sources of supply. And then, orchestrating the multimodal network. So this is basically saying, hey. How do I how do I get, you know, more aggressive in terms of of how I'm, you know, sourcing my components? Who do I source from? You know, moving percentages across, creating much more flexibility, you know, with my suppliers and also getting closer to the suppliers. So I always ask companies. I said, you know, you you do a quarter of business for you as your suppliers. You know, the suppliers could could then turn that around and say, how would they rate you as a customer? And, you know, kind of opened it up and said, you know what? We need to think about that. And then fourth, you know, we and this is really, you know, elevating decisions with AI. You know, we started a year ago with just making some trials. Now, you know, everybody is full fledged into using AI, and they're starting to measure results. And and, basically, you know, every every company that we're working with, there's, AI in, you know, AI agents in the supply chain, planning everything from planning to sourcing to the operations, awarding, resolving, basically discrepancies even, you know, right down into payments. So what what really this is about, we call this the adaptive supply chain. And it basically says instead of building a supply chain for cost, you know, and we used to do this when we were designing products, we would design for cost, design for manufacturability, design for sustainability so we can recycle. And and really, we wanna apply those same principles to the supply chain. We wanna design it to be adaptive, and that's really in the end, what, you know, kind of creates the resilience. So I I wanna give a few moments over to, to Sven and Stepan to to add to that. What are your thoughts, guys? Yeah. Maybe, considering the time as well, maybe some some last words, from from my point of view on that. So I think the good news is I mean, there is a let's say, there's a lot of challenges, but the good news is there's tools to manage those as well. Right? And I think, Mark, you you pointed it out here perfectly fine as well. There is tools that that basically can help on on those process on the planning side, in order on the modeling side in order to to have an adaptive supply chain. I think the key to keep in mind, and maybe that's one of the of the key messages, to take with you as well, is that it requires the so called rewiring of procurement like we like we call the webinar as well. So it is a change that needs to be done. So not considering procurement as a back office efficiency layer that is is maybe just just in brackets doing doing sourcing, events, but really helping to develop in the company a resilient function. Right? So to help as a central piece in that whole picture with supply chain and as a linkage to finance as well to help building, resilience for the for the company in order to to be able to manage those those risks that we see currently. As such, they they will remain and, obviously, then going forward to manage them as well. I couldn't agree more to both of you. Right? So to to ensure supply chain performance, it's about bringing operating model, right, process organization and technology together, and then you can solve certain issues. And I would say, we see now is the the right time to bring those parts together to professionalize our target operating models. And I think that's what what we discussed and outlined due to the, certain certain discussions. So, you've heard a lot from us. Right? And, but we want you to reach out. Right? I mean, each and every one, you know, please reach out, questions, connect with us. We'd love to hear from you. Right? And, after all and I mean, this is our passion. Right? We love supply chains, and we love working with them and and with our our customers and prospects and and, you know, the whole community. So if, you have, you know, please point your phone, grab, you know, connect with us, and and let's, let's go on together, you know, to this I mean, we're all working on the same journey. You know, chaotic supply chains. Basically, that's our livelihood. I love it. Okay. So, with that, well, I guess we'll wrap up our session. We're right on time at at the, two minute mark. We really appreciate you, coming, and and thanks for participating in the polls. We love getting that pulse, and I think a few of them that I think you guys that's kinda surprised me. I still have that intern that's making the spreadsheet for me, so I appreciate that. So with that, we'll we'll close the session, and everybody have a great, great afternoon and a great evening.