Mercedes-Benz: Streamlining Sustainable Supply Chains

To ensure Mercedes-Benz stays at the forefront of manufacturing engineering, it is taking the steps to enhance its supply chain strategy.

In order to maintain efficiency and productivity across its teams, it is now turning to automation and 'Game Theory' to develop better supplier relationships. 

It is also positioning itself at the forefront of sustainable transformation to solidify itself as a socially responsible business. 

Mercedes-Benz refines its procurement focus

Mercedes-Benz strengthens its procurement by combining digital tools, automation and a circular supply chain.

The German automotive brand’s strategy centres on improving supplier performance, maintaining fair competition and embedding sustainability in every stage of sourcing.

Procurement specialists at Mercedes-Benz use ‘Game Theory’ – a model of interactive decision-making – to manage supplier negotiations. The method sets clear, data-led rules that ensure transparent bidding and fair competition.

Christian Netenjakob, Project Coordinator at Mercedes-Benz AG, explains: "We work on selected strategically-important sourcing scopes. We optimise the sourcing process in the interest of ensuring that Mercedes-Benz ultimately chooses the best supplier.

"Game theory is a scientific methodology that helps us analyse strategic interactions between participants in a market. Based on analyses and through the application of game theory methodologies, we define rules that are later applied to real negotiations and order allocations.

"These rules are binding for both Mercedes-Benz and the participating suppliers. This allows us to ensure fair competition and a transparent sourcing process."

This scientific model helps the company’s supply chain teams evaluate suppliers’ strengths, detect risks early and design fair terms that motivate high performance.

Christian's team advises purchasing specialists on how best to apply the theory so that both Mercedes-Benz and its partners achieve better commercial outcomes. Collaboration and open communication remain central to its success.

Building a digital backbone

Automation now underpins Mercedes-Benz’s operational excellence. To improve efficiency and procurement speed, the company consolidates its once-fragmented IT infrastructure into a more cohesive system.

This includes migrating core business applications to the cloud through SAP RISE, enabling faster access to data and integrated analytics.

Chief Information Officer Katrin Lehmann says: "We had quite a differentiated system landscape overall, with many, many different applications. Now, we need to consolidate the data, put it on platforms, move to the cloud, ensure that this data is available because AI only works as well as the data foundation you have.

"We signed an SAP RISE deal to ensure that the most important applications can go to the cloud, as we can also consume AI and Joule and all the cool innovation stuff that we need for our colleagues to be even more efficient and productive."

Through this digital transformation, procurement teams gain real-time insights into supplier performance, price fluctuations and material availability.

Predictive forecasting models use historical and live data to plan sourcing decisions and mitigate risks.

The outcome is a more agile procurement system, able to respond quickly to market conditions while ensuring cost efficiency and supply stability.

Automation also simplifies collaboration between global teams and suppliers, removing manual bottlenecks and standardising processes.

This technological foundation allows Mercedes-Benz to focus more on strategic supplier development and less on repetitive transactional work.

Circularity in the supply chain

Mercedes-Benz aligns its procurement with circular economy principles to reduce waste and resource dependency.

The company’s sustainability strategy focuses on six key areas: environment and climate, resources and circularity, human rights, traffic safety, digital trust and people. Each is integrated into procurement and supply chain policies.

At the Kuppenheim mechanical-hydrometallurgical recycling plant in Germany, Mercedes-Benz achieves a 96% recovery rate of materials. By processing end-of-life parts, batteries and metals, the plant reduces demand for new raw materials and cuts CO₂ emissions.

In 2022 alone, 32,400 tonnes of used materials were recycled in Mercedes-Benz’s German operations. The company continues to expand its use of secondary materials across manufacturing, lowering production costs and stabilising material supply.

Circular procurement not only supports environmental goals but also mitigates volatility in the global supply chain.

By building systems that recover and reuse materials, Mercedes-Benz reduces its reliance on external raw material suppliers and lessens the impact of market disruptions.

The company’s circular model demonstrates that sustainability can align with financial value. Recycled materials reduce expenditure, minimise waste-handling costs and enhance supply security.

This approach positions Mercedes-Benz’s supply chain as both resilient and efficient, balancing operational demands with long-term sustainability targets.

By combining strategic negotiation, digital automation and circular design, Mercedes-Benz continues to reshape procurement into a smarter, more sustainable supply network.

Each element strengthens the company’s ability to manage costs, ensure transparency and maintain a consistent flow of materials across global operations.