Building Resilient and Agile Supply Chains in the Face of Global Disruptions with Tilo Else, VP, Procurement, Grid Technologies at Siemens Energy [Speaker Spotlight]

At this year’s European Supply Chain Summit, Tilo Else, VP Procurement of Grid Technologies at Siemens Energy, will share his insights on how the company is adapting its procurement strategy in response to global supply chain disruptions. His session will delve into the importance of building resilient supplier relationships, leveraging digital tools like AI to avoid data overload, and fostering adaptability within procurement teams to meet evolving challenges.

In his role, Tilo leads procurement across Siemens Energy’s business area “Grid Technologies”, focusing on securing supply and resilience management, driving innovation and sustainability while ensuring operational efficiency and affordability.

Don’t miss the chance to hear his perspective on how Siemens Energy is navigating the future of procurement—all taking place at the European Supply Chain Summit.

Could you begin with a brief introduction about yourself, and an overview of your responsibilities as the VP of Procurement and Grid Technologies at Siemens Energy?

Siemens Energy is one of the world’s leading Energy Technology companies structured in four business areas along the energy value chain.

The starting point is where electricity is being generated:  Siemens Gamesa, is dedicated to the development and deployment of renewable energy technologies especially On- and Offshore wind turbines. Then we have Gas Services, one of the most experienced power generation companies globally with a comprehensive portfolio handles everything related to gas-fired power plants and turbines. Another business area is the Transformation of Industry, providing energy solutions tailored for industrial customers. It includes products and services for energy efficiency, process optimization, and digitalization in various industries aiming to help industries reduce their carbon footprint and improve operational efficiency. 

I am leading procurement of Grid Technologies, which is the backbone of the energy transition focusing on the transmission of electrical energy, bringing the electrons from the producer to the consumer.

As for my background, I started my career in procurement in 1994 at a factory level. After six years, I moved into Siemens AG's corporate procurement & logistic consulting team.

Later I became Strategy Head and commercial Sales Head for the entire transformer business, a multi-billion-euro business, where I managed several M&A deals, both buy-and sell-side, driving key customer development and setting up effective sales channels before taking on a factory CFO role. For 11 years, I managed various business segments in CFO and CEO role with full P&L responsibility, including distribution transformers (16 factories) and medium voltage switchgear (23 factories)

Two years ago, I moved back into procurement in my current role. Having worked across procurement, sales, strategy, P&L leadership, and global operations, I now leverage that 360-degree experience to drive procurement. It gives me perspective, as I've sat on "the other side of the table" many times.

How has Siemens Energy adapted its procurement strategy in response to recent global supply chain disruptions?

First, we need to define "disruption." Obviously, not everybody enjoyed the time of COVID. That was the first major disruption we experienced, and the main focus was to ensure the supply chain remained stable. Previously, we relied heavily on sourcing from some specific regions; however, COVID-19 caused us to completely rethink our sourcing strategy and ensure that we are more independent and resilient to events like this.

We began building more resilient strategies, focusing on multiple sources, alternative materials, and redesigning products to reduce dependency on single source suppliers.

We also faced challenges like supplier factory burning down, flooding, the Strait of Hormuz, supplier bankruptcies, and geopolitical instability. Financial risk monitoring has therefore become a key focus.

Looking ahead, the energy transition means massive growth in demand for our equipment. That requires not only expanding our own capacity, but also ensuring suppliers ramp up theirs. And it's not just us, our competitors are also expanding, so supplier capacity planning becomes critical.

Finally, we also closely monitor natural disasters and geopolitical disruptions, such as floods, earthquakes, fires, or conflicts. We use tools to map potential impacts, enabling us to react quickly when something occurs.

How do you ensure that digital tools like AI or digital twins generate actionable insights rather than just data overload?

There are countless tools in the market, but we have a clear strategy we are looking into. We need to ask ourselves, what do we want to achieve with it? So what? What's the outcome? What actions do we want to take with it to avoid that kind of data overload?

We avoid creating data for the sake of creating data. Because it's nice to create thousands and tons of data if nobody is looking at it and doing anything with it, so it doesn't help at all, right? Instead, we define clear use cases with specific actions in mind while testing AI solutions for different applications.

For example, we're piloting AI in various applications and training our teams on how to use these tools effectively. But it all starts with data quality. If the data is poor, no tool will deliver meaningful results. 

How is predictive analytics being used at Siemens Energy to anticipate supply shortages or bottlenecks before they occur?

To identify shortages or bottlenecks, the first thing you need is a forecast. You need to know what you'll require in the short term, midterm, and long term. If you don't know that, how could you ever predict shortages?

We are working on the forecasting process, which is quite complex in our industry. We don't do mass production; instead, we deliver individually engineered products, systems, and projects. At the point of order intake, we don't yet have a complete bill of materials. There's still engineering and development work to be done. Breaking that down into a reliable forecast is the biggest challenge.

It's not as simple as applying a tool and letting it predict everything for you. Yes, we do experiment with predictive forecasting, based on historical data and demand patterns, and that helps us move in the right direction. But forecasting has a second dimension: knowing supplier capacity and loading. Suppliers don't exist only for us; they also serve other customers. Their availability might change depending on pricing, market demand, or other factors. That makes the topic very difficult for AI to address at the beginning, because the prerequisite is reliable data.

So right now, we are focused on building the necessary data foundation. Only once we have that in place can predictive analytics really deliver value. And that's where we currently are.

How does Siemens Energy engage with suppliers to ensure they meet both resilience and environmental standards?

When it comes to resilience and environmental standards, this has been a key part being added to our procurement strategy. When I took over, It was important for our team to change, 'We need to do things differently.' We need to work much more closely with suppliers in a collaboration mode.

My background in sales showed me how valuable true relationship management can be. Some customers treated me only transactionally, but the few who built real partnerships made a huge difference. That's what I wanted to bring into procurement.

Yes, cost focus is essential—that's part of our job. But we must also prioritize relationships. We identify our key suppliers, the ones we truly want to partner with. Then we engage differently: closer communication, multi-level relationships, even joint execution on long-term strategic measures.

I can always say to a supplier, "It's your risk—invest or don't, I don't care." But actually, I do care. Risks are shared, and outcomes affect both of us. For our key partners, we share responsibility and in more and more cases we share the risks.

I wouldn't do this with every supplier, but for the important ones we've introduced this approach over the last two to three years. It's been working well, and suppliers really appreciate it.

On the environmental side, sustainability is core to our company's mission. Our customers expect us to support the energy transition and drive sustainability.

We've developed a comprehensive framework with suppliers. For example:

• We require suppliers to complete a Due Diligence Assessment (DDA) through our web-based tool or provide evaluations from external platforms, such as EcoVadis.
• We provide training and resources through a dedicated website, because this is a complex topic that cannot just be "googled."
• We ask suppliers to develop their own decarbonization roadmaps, with clear targets, for example, reducing Scope 1 and 2 emissions by 30% by 2030 against a defined baseline.
• We expect suppliers to move toward 100% renewable electricity. Where that isn't possible due to local conditions, we accept certificates, but the direction must be green energy.

These are just a few examples. Overall, we are very active in driving sustainability together with our suppliers.

How does the complexity of grid technologies influence your approach to supplier qualification and risk management?

Our business is complex because we cover a wide range of activities: service, “start-up”-kind of business, products & systems, and large projects. On the one hand, this diversity is a challenge. On the other hand, it’s also an advantage, because it has forced us to build strong risk management processes over time.

Of course, the approaches differ somewhat between system business, project business, and service. But at the end of the day, the principles are the same. It always comes back to the common ground: single-source risks, supplier bankruptcies or financial instability, and capacity constraints. These are issues we must address no matter which type of business we are running.

In system business, for example, you work with many suppliers repeatedly, so the scope is larger. In projects, it’s a bit different, but the fundamentals still apply. We had many discussions about how to unify our approach across businesses, and we’ve managed to do that. I’m very pleased with the system we have in place now.

Supplier qualification is, of course, a key part of this. Whenever we face single-source dependency, need alternative sources, or develop new products, supplier qualification becomes essential. We have a clear process and organization for this, with milestones and strict requirements. We welcome new suppliers, but we don’t compromise on quality. That’s why the process is so important.

"But at the end of the day, the principles are the same. It always comes back to the common ground: single-source risks, supplier bankruptcies or financial instability, and capacity constraints. These are issues we must address no matter which type of business we are running."

Looking ahead, what emerging disruption do you believe companies are still underestimating in their supply chain strategies?

First, we should ask whether we’re talking within one industry or across industries. If I look more broadly, independent of industry, I see two major areas.

The first is AI and digitalization. Developments are moving extremely fast. To give you an example, we are experimenting with “agentic AI”. The use cases we've already seen are quite powerful. If you look at the timeline—from simple EDI interfaces, to dashboards, to AI, and now to agentic AI—it is steeply accelerating.

Right now we’re also piloting contract AI, which can read an entire contract, flag the critical areas, and clear everything else. That saves enormous amounts of time. We’re even experimenting with “negotiation” AI, where software agents negotiate with each other. That means you could eventually have no buyers involved for certain topics. This has the potential to completely disrupt strategic procurement.

The second is geopolitical risk. We sense a lot of tensions in the world and potential armed conflicts, that would have a massive impact. Such a disruption would force drastic changes.

How do you foster resilience and adaptability within your procurement team during times of uncertainty?

It begins with transparency. You need to anticipate what may happen, to define potential reactions. So we are building tools and methods that provide this visibility.

Adaptability then comes from changing processes, data structures, and tools to allow for more flexibility. You need the ability to foresee potential trends, think through what might happen in different scenarios, and have processes that can cope with those situations. That’s the right direction.

We’ve moved away from rigid, one-size-fits-all processes. Instead, we focus on flexibility. Let me give you one example on the HR side. In the past, we expected key people to relocate to Erlangen, our head office. Today, with our global setup and digital tools, that’s no longer necessary. We hire talent where they are—London, Milan, the Netherlands, Berlin, Munich, or elsewhere.

What pivotal career decision or experience most shaped your approach to leading procurement at a global scale?

When I started my career in procurement, I loved it so much that I didn’t want to leave. But I told myself, 'You need to see other things.' You need to understand how a factory works, how production runs, how customers think, how sales operates. You need to broaden your scope.

That decision was key. It gave me a wider perspective. When I now sit down with a supplier’s CEO, I understand his position better, because I’ve been in similar situations myself, running businesses, carrying P&L responsibility. I can better understand what drives him, and I do know our own needs. That makes it easier to find common ground and reach agreements.

Another important factor was working globally. Most of my professional life I spent outside Germany, in China, the UAE, Canada, Colombia, Brazil, and more. I served on boards in different countries and led teams across cultures.

Procurement is a people function. Negotiations in China are completely different from those in the U.S., the Middle East, or Germany. You need cultural sensitivity, and the best way to build that is through experience. Living and working in different cultures has been extremely valuable and still helps me every day.

Which aspect of the European Supply Chain Summit are you most looking forward to?

I’m looking forward to the insights from other companies—how they approach the same challenges we all face. At the end of the day, many of the issues are similar, even if the details vary by business.

Take digitalization, for example: everyone is dealing with it, no matter their sector. So I’m really interested in hearing different perspectives, exchanging ideas, networking, and following the presentations to see how others are addressing these topics.

We would like to extend our sincere thanks to Tilo Else for his valuable participation and insights in this blog. We are excited to have him join us at the European Supply Chain Summit, where he will share his expertise on navigating procurement challenges and building resilient supply chains.

Don’t miss the opportunity to hear from Tilo and many other exceptional speakers. Secure your seat today and be part of the conversation that will shape the future of supply chain management.