The greatest potential for savings often lies not in the price of a product, but in the processes behind it.
Many companies look for savings potential in procurement and often focus first on prices and supplier terms. However, in indirect procurement in particular, the highest costs often arise elsewhere: in the process itself.
A single order for office supplies, a new software license, or a service needed on short notice seems harmless at first. But when numerous small requirements arise daily, different departments use their own suppliers, and invoices arrive through various channels, it creates organizational complexity with significant costs.
As a result, indirect procurement becomes an area where many companies have great potential but often do not know exactly where to start.
In many companies, direct procurement is traditionally the primary focus. Raw materials, production supplies, and components are strategically planned, suppliers are specifically developed, and volumes are negotiated regularly.
Indirect procurement often works differently. Here, requirements arise decentrally across many different areas. IT needs software, marketing commissions an agency, facility management orders consumables, and employees need specific equipment on short notice.
Every single procurement may make sense. The challenge arises from the sheer number of transactions.
Typical consequences include:
The costs often arise not from the product itself, but from the processes necessary to procure that product.
The greatest potential for savings is often found where companies have built their own processes over years without regularly questioning them.
Maverick buying refers to procurement outside of defined purchasing processes. This is rarely a case of intentional rule-breaking. Employees often choose the path that solves their task the fastest. If an order takes several days through the official process, while a direct order from a supplier takes only a few minutes, a natural incentive for workarounds is created.
However, the consequences are significant:
The solution, therefore, is not just more control. The purchasing process must be so simple and fast that it is actually used.
Many companies still work with manual approvals via email or individual coordination in indirect procurement. A request moves from one inbox to the next, questions arise, and information has to be transferred multiple times.
The problem is not just the longer processing time. Every manual step also increases the likelihood of errors, missing information, or delays. Digital approval processes create a clearer workflow here. Responsibilities become visible, approvals become traceable, and decisions are made faster.
An invoice without a clear purchase order reference often leads to unnecessary manual work.
Accounting must clarify:
These checks are necessary, but they cause effort that could be reduced through structured processes. The greater the number of individual invoices, the more this complexity impacts the business. Our article on Tail Spend Management shows how an uncontrolled multitude of small requirements can be structured.
The most successful companies don't try to speed up every single process step. Instead, they first reduce the complexity that created the need for those steps in the first place.
The first step is always to get an overview. Which suppliers are being used? Which product categories generate the most orders? Where are many small, individual purchases occurring?
Without this transparency, optimization remains difficult because companies only look at individual transactions rather than recognizing the overall pattern.
Many small orders can be bundled or handled through structured processes. This isn't about centralizing every procurement activity; it's about creating simplicity where many similar transactions generate unnecessary effort.
A key starting point is reducing supplier and creditor complexity. Pedlar's 1-creditor model focuses exactly on this. Diverse requirements and supplier relationships remain flexible, while administrative processing is simplified through a single central creditor.
This allows companies to reduce interfaces, invoicing effort, and operational coordination. We explain why this approach forms the foundation for leaner procurement on our Why Pedlar page.
Automation can offer enormous benefits. However, there is one important principle: a bad process does not automatically become better through automation. If you digitize an unclear and complex workflow, you often just end up with a faster complex workflow.
Therefore, the order of operations should always be:
Many companies try to manage increasing complexity with additional tools, rules, and approval processes. But long-term efficiency isn't achieved by managing more complexity.
It is achieved by reducing unnecessary complexity. Just as Amazon didn't make its processes scalable by adding more manual steps, companies cannot become more efficient in procurement by adding more layers of coordination.
The key lever is to simplify structures.
Indirect procurement offers companies significant opportunities to reduce costs. However, the biggest lever isn't always the price of a product. Often, the highest costs arise from processes that have grown over the years and now cause more effort than they provide in value.
Creating transparency, clarifying responsibilities, and reducing unnecessary complexity lays the foundation for more efficient procurement. Ultimately, the cheapest order isn't always the one with the lowest price. It is the order that achieves the right result with the least amount of unnecessary effort.
This post draws on insights from a guide by sachsen-net.com and interprets them from the perspective of the single creditor model. Click here for the original article.
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