With Pedlar, one-off purchases can be integrated into existing procurement structures where catalogues, framework agreements and fixed suppliers reach their economic limits.
Standard items, spare parts, office supplies, software, services or a custom-made product are all part of everyday indirect procurement. Completely different requirements come together here, and yet they are often mapped to the same processes. What matters, however, is not which procurement route is fundamentally the best, but which route suits the requirement in question.
An item that is ordered every month places different demands on procurement than a spare part that may be needed once in five years. In the same way, a strategic supplier should be treated differently from a supplier from whom something will probably be ordered exactly once. Taking these differences into account allows procurement processes to be structured more deliberately, and avoids the administrative effort of an order being higher than necessary.
The more regularly a requirement arises, and the better the volume needed can be estimated, the more worthwhile a lasting supplier relationship becomes. Framework agreements create clear conditions for this. Prices, terms and scope of service are agreed in advance and do not have to be renegotiated for every individual order.
This procurement route is particularly useful for products and services that are needed regularly and in a predictable volume. The effort involved in selecting, checking and negotiating with the supplier pays off, because it is offset by numerous future orders. For a one-off requirement, the calculation looks different. An extensive supplier process for a source of supply that may never be needed again does create the same formal structures, but economically it is often out of all proportion to the purchase value.
Products that are needed regularly and in a comparable form can be standardised even further. This is where catalogues play to their strengths. Employees draw on a defined range, product data is stored in a structured form, and the procurement route is predefined. Instead of searching for a suitable source of supply again for every order, procurement takes place within a structure that has already been established.
This reduces effort and at the same time ensures that as many orders as possible run through agreed suppliers and terms. Pedlar therefore deliberately draws a line between the Single Creditor Model and this area. Recurring framework agreement requirements belong in existing catalogue and supplier structures. An additional flexible procurement route should not replace these processes where they already work efficiently.
Not every catalogue has to sit entirely within your own procurement system. With a punchout connection, the user starts in their familiar procurement system and switches from there into a supplier's connected external catalogue. There they assemble their shopping basket and then transfer it back into their own system. Approval, budget check and ordering therefore continue to run within the company's existing processes.
This approach is particularly useful when a company orders regularly from a specific supplier and wants to use that supplier's current range directly. The effort of setting up and maintaining the connection pays off because it is used again and again. The less often a supplier is needed, however, the worse the ratio between set-up effort and actual use becomes. For a strategic supplier with many orders, a dedicated punchout connection makes sense. For a supplier from whom perhaps only one specific spare part will ever be needed, it often does not.
This is exactly where the area of one-off purchases begins. A production employee needs a particular spare part at short notice, the development department needs a specialised technical component, or another business unit needs a specific piece of software or a service. Requirements of this kind are difficult to include in a catalogue in advance. This is not down to poor planning in procurement, but to the fact that one-off purchases are by their very nature irregular and hard to predict.
Nevertheless, these products and services still have to be procured. The classic response is often to set the supplier in question up as a new supplier. Data is recorded, checks are carried out and approvals are obtained. With the next special purchase from a different supplier, the same process starts all over again. Over time, this creates a long tail of suppliers that were used only rarely, or even only once.
The Single Creditor Model is designed for exactly this situation. Instead of permanently adding every new source of supply to your own supplier master data, Pedlar is set up once as a central creditor. One-off purchases from different suppliers can then be handled through this creditor. The business unit's choice of source of supply remains flexible, while the administrative route is made uniform.
After the order, Pedlar handles the onward processing with the respective supplier as well as payment, delivery coordination and central invoicing. For the buying company, many different sources of supply therefore become a single, uniform procurement route. A new supplier does not automatically mean that a new creditor has to be created and permanently maintained.
Companies do not have to choose between catalogues, punchout and Pedlar. The different models solve different tasks within procurement. Framework agreements and catalogues are strong when requirements recur and are predictable. Direct punchout connections are suitable when a particular supplier's range is accessed regularly. The Single Creditor Model, by contrast, applies where these structures are no longer economically sensible and rare, changing or non-catalogued requirements arise.
With Pedlar Punchout, this area can also be integrated into the existing electronic procurement system. The user can capture their individual requirement through Pedlar and then return the shopping basket to their own system. Approval, budget check and ordering therefore remain part of the familiar processes, while in the background different sources of supply can be handled through a single creditor.
Efficient procurement does not mean forcing as many transactions as possible through exactly the same channel. Rather, it means creating suitable processes for different types of requirement. Recurring requirements are standardised, strategic suppliers are integrated on a lasting basis, and for rare purchases a route is created that is flexible enough for changing sources of supply without triggering a new administrative process every time.
In this way, catalogues and framework agreements can be used where standardisation makes sense, while the Single Creditor Model absorbs the part of procurement that cannot be planned in advance.
Would you like to discuss how your one-off purchases can be integrated more efficiently into your existing procurement processes? Schedule a call →
