Rethinking indirect procurement with a single supplier model for less operational pressure
In the previous article, it became clear why many purchasing departments are stuck in operational mode. One area that particularly reinforces this situation is indirect procurement. It is not so much the result of a lack of strategy as one of the main reasons why strategic work is barely possible in everyday life.
Indirect procurement creates a variety of small, often short-term requirements. Unlike direct purchasing, there is a lack of clear predictability and long-term demand structures. Instead, new individual inquiries are constantly being received from different specialist areas. Each seems manageable on its own, but overall, they result in a permanent stream of operational tasks. It is precisely this electricity that ties up capacities and keeps purchasing in response mode.
Many of these requirements are individual and are difficult to squeeze into classic shopping logics. Attempts to represent them via catalogues, fixed suppliers or rigid processes quickly reach limits. Departments need flexibility, purchasing is trying to structure. This results in friction, which often results in processes being circumvented or solved manually in a complex manner. Operating expenses continue to rise instead of falling.
Indirect procurement has grown over the years in many companies. Different suppliers, individual solutions and decentralized decisions lead to a high degree of fragmentation. For operational purchasing, this means constantly switching between different requirements, contacts and processes. This fragmentation prevents efficiency and makes any form of bundling or control difficult.
As long as indirect demands are processed in this form, purchasing will necessarily remain in operational mode. Strategic initiatives do not fail because of a lack of ideas, but because the necessary capacities are lacking. Anyone who wants to enable strategic purchasing must therefore start right here and reduce the operational pressure that results from indirect procurement.
One effective lever is to structurally bundle the multitude of individual processes. Pedlar's 1-creditor model starts right here. Indirect one-off requirements are no longer handled by numerous individual suppliers, but managed centrally by a partner. This significantly reduces the number of operational interfaces.
For operational purchasing, this means fewer individual processes, less coordination and less complexity in day-to-day business. At the same time, a clearer structure is being created, which makes it possible to regain control over indirect procurement without restricting the necessary flexibility for specialist areas.
Indirect procurement is one of the main reasons why purchasing departments remain in operational mode. The large number of individual requirements, the low degree of standardization and the increased fragmentation create constant work pressure. If you want to change this situation, you don't have to start with the strategy, but with operational relief. Only when it is possible to reduce the complexity of indirect procurement is there room for what should actually be the focus.
