Why process costs for unstructured requirements are barely in relation to the value of the goods
When it comes to purchasing, you quickly think of major negotiations, price optimizations and strategic partnerships with key suppliers. But it is often not the value of the goods that weighs on the budget, but the effort behind it. That was exactly what Witzenmann GmbH made clear. An average one-time requirement cost 260 euros, but the processing costs were up to 140 euros per order. With over 300 one-time requirements per year, this resulted in additional process costs of 42,000 euros, which do not even begin to contribute to the profitability of the company.
And that was the real lever. Not in terms of the price of the products themselves, but in the invisible costs of the processes. Every manual supplier research, every approval loop, every check of an individual invoice added up to a cost block that significantly affected profitability.
This is exactly where Pedlar comes in. With the 1-creditor model, Pedlar handles the entire processing of these one-time requirements. Witzenmann adds Pedlar once as a supplier in the system. From then on, every spontaneous order is processed centrally via this one vendor. Pedlar processes the order, ensures a comprehensible, process-compliant process, checks the order confirmation, tracks shipments and clarifies discrepancies. Pedlar also takes care of logistics and invoicing. Everything that previously had to be laboriously and manually done by the purchasing department is no longer necessary.
The result is impressive relief. Witzenmann was able to reduce process costs by 85 percent. In concrete terms, this means savings of 35,700 euros per year. But it is even more important that buyers no longer lose their time in administrative routines, but can invest in value-adding topics, from product group strategy to supplier development.
Our case study shows that the biggest savings potential in purchasing does not always lie in negotiations or price reductions. It is much more often the invisible processes that tie up capacities and weigh on budgets unnoticed.
Purchasing has long meant more than just comparing prices. Anyone who keeps an eye on process costs and consistently optimizes them discovers potential savings that are often far greater than the actual value of goods.
