At first glance, indirect procurement seems unspectacular in many companies. Individual requirements arise, are enquired, ordered and delivered at some point. Precisely because these processes often seem relatively small, the underlying process is rarely examined in more detail. But this is exactly where one of the biggest hidden inefficiencies in purchasing lies.

A typical one-time requirement passes through several stations before it actually arrives at the company. There are numerous reconciliations, approvals and organizational steps between the first requirement report and the final invoice. Each one of them can cost time. Taken together, the result is a process that can take several weeks.

What a typical procurement process actually looks like

It usually starts with a simple requirement report from a specialist area. For example, a team needs a special service, a spare part, a marketing service or a unique product. The request is passed on to the purchasing department, often by e-mail or via an internal ticket system.

Purchasing first checks requirements. Does a suitable supplier already exist? Is there an existing contract? If not, the search for suitable providers begins. Offers are obtained, compared and coordinated internally. Depending on the company structure, several approval steps follow.

As soon as a decision has been made, the supplier is created in the system. Master data must be checked, tax information must be queried and internal guidelines must be met. Only then can the actual order be placed.

After ordering, the next phase of the process begins. Order confirmations are checked, delivery dates are coordinated and queries are clarified. As soon as the service has been provided or the goods have been delivered, the invoicing and its verification in the company follows.

What looks like a clearly structured process on paper often develops into a complex interplay of emails, queries and system steps.

Where most time is lost in the process

The actual time losses are rarely caused by individual major delays. Many small waiting times add up much more frequently along the entire process.

The search for suppliers is a common time waster. Especially when there are one-off needs, there are often no existing relationships. Purchasing must identify and contact vendors and obtain offers. This phase alone can take several days.

Internal reconciliations also extend the process. Offers are forwarded, budgets must be reviewed and decisions are discussed in several loops. Each query creates an additional waiting time.

Another factor is media breaks between different systems and communication channels. Demands are reported via email, offers are available as documents, orders are created in the ERP system and reconciliations run in parallel via various channels. These transitions take time and at the same time increase the risk of misunderstandings.

Creating new suppliers is often particularly complex. However, for one-off requirements, master data must be checked, documents collected and approvals obtained. The administrative effort is often disproportionate to the actual procurement value.

There are also delays at the end of the process. Invoices must be assigned, checked and approved. If information is missing or orders are not clearly referenced, additional clarification loops arise.

Why one-time requirements in particular are so inefficient

While strategic procurement usually has clearly structured processes, many indirect demands fall into a grey area. They are too individual for standardized catalogues, but at the same time too small to economically justify extensive procurement processes.

The result: a mismatch between the cost and value of the order. A one-time requirement can require several days of coordination and administrative work, even though the actual procurement value is relatively low.

For purchasing departments, this means that a significant portion of operational capacity flows into processes that offer little strategic added value. At the same time, supplier master data and administrative complexity continue to grow.

How a Singles Supplier model can shorten processes

One approach to reducing this process complexity is to bundle such one-time requirements using a 1-creditor model. Instead of creating new suppliers for each individual procurement and going through complete procurement processes, companies can process specific requirements via a central creditor.

This is exactly where Pedlar comes in. Companies set up Pedlar as a supplier in their own system and can then process many indirect one-off requirements via this one creditor.

Pedlar is responsible for operational procurement in the background. For the company, the process therefore remains significantly leaner, as only one creditor is administratively controlled. Process times can be reduced by up to 85%.

Especially for rare or unstructured purchases, this approach reduces several of the biggest time wasters in the process and makes procurement efficient. Supplier search, creation of new creditors and a large part of operational coordination are outsourced, while purchasing continues to maintain transparency and control over demand.

conclusion

Indirect procurement rarely wastes time at a single point. Instead, the loss of time is caused by many small delays along the entire process — from the requirement report to the invoice.

The search for suppliers, internal coordination, media breaks and the creation of new creditors mean that even small purchases require a surprising amount of effort.

Companies that take a holistic view of these processes and simplify them in a targeted manner can achieve significant efficiency gains. Approaches such as 1-creditor models help to reduce administrative complexity and relieve purchasing of operational process work.

Would you like to simplify your procurement processes? Talk to us now!

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