Procurement Glossary
Requirement notification: Definition, process and strategic importance in Procurement
November 19, 2025
A purchase requisition is the formal starting point of every procurement process and documents the specific need for materials, products or services within a company. It forms the basis for all subsequent purchasing activities and ensures structured, traceable procurement. Find out below what constitutes a purchase requisition, which methods are used and how you can minimize risks.
Key Facts
- Requirement notifications initiate the entire procurement process and create transparency regarding required resources
- They contain essential information such as specifications, quantities, delivery dates and budgets
- Digital requisition systems reduce throughput times by up to 40% compared to paper-based processes
- Structured demand reporting enables effective demand bundling and cost savings
- Incomplete or late purchase requisitions cause an average 15-25% increase in procurement costs
Contents
Definition: Demand report
A purchase requisition systematically documents the need for goods or services and initiates the procurement process. It acts as a central communication interface between the areas reporting requirements and Procurement.
Essential components of a notification of requirements
Each complete demand report includes specific core information:
- Detailed product specifications or service descriptions
- Required quantities and desired delivery dates
- Budget framework and cost center
- Intended use and technical requirements
Requirement notification vs. purchase requisition
While a purchase requisition communicates the basic requirement, a purchase requisition already details specific suppliers and conditions. The requirements analysis takes place between these two steps.
Importance of the requirement notification in Procurement
Requirement notifications enable strategic requirements planning and create the conditions for efficient procurement processes. They support the bundling of requirements and enable better negotiating positions with suppliers.
Methods and procedures
The systematic recording and processing of purchase requisitions requires structured methods and clear processes. Modern companies rely on digital solutions and standardized workflows.
Digital demand response systems
Electronic systems automate the reporting process and integrate seamlessly into existing ERP landscapes. They offer benefits such as automatic validation, workflow control and reporting functions.
- Automatic plausibility check of the entered data
- Integration in approval workflows with defined approval stages
- Real-time overview of processing status and throughput times
Standardized categorization of requirements
The classification of purchase requisitions according to material groups and procurement categories enables efficient processing. Different categories require specific handling processes and release procedures.
Quality assurance and completeness check
Systematic checking procedures ensure the completeness and quality of incoming purchase requisitions. Checklists and automated validation rules reduce queries and speed up processing considerably.
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Important KPIs for demand reports
Measuring the efficiency of requisition processes requires specific key performance indicators. These KPIs enable continuous optimization and quality improvement.
Throughput time and processing speed
The time from demand notification to order release is a critical success factor. Short lead times reduce stock levels and improve responsiveness to market changes.
- Average processing time per request
- Proportion of notifications exceeding the target processing time
- First-pass yield rate of complete demand reports
Quality and completeness
The quality of incoming requirement notifications has a direct impact on the efficiency of downstream processes. Complete and precise notifications significantly reduce queries and processing time.
Cost savings through demand bundling
Systematic demand pooling based on structured notifications generates measurable cost savings. The analysis of bundling potential and realized savings shows the direct value contribution of optimized requisition processes.
Risks, dependencies and countermeasures
Inadequate requirements reporting processes can cause considerable operational and financial risks. Systematic risk analysis and preventive measures are therefore essential.
Incomplete or late notifications
Missing or insufficient information in purchase requisitions leads to delays and additional costs. Delayed notifications prevent an optimal procurement strategy and can make emergency procurements necessary.
- Implementation of mandatory fields and validation rules
- Training of employees on complete requirement specifications
- Early warning systems for critical delivery dates
Maverick buying and process circumvention
Maverick buying bypasses established requisition processes and jeopardizes compliance and cost control. Decentralized procurement without proper documentation creates a lack of transparency and risks.
System failures and data quality
Technical faults in requisition systems can paralyze the entire procurement process. Insufficient data quality and a lack of standardization make the automated processing and analysis of requirements information considerably more difficult.
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Practical example
A medium-sized mechanical engineering company implemented a digital requisition system with automated workflows. The IT department reported the need for 50 new laptops via the system, including detailed technical specifications and the desired delivery date. The system automatically recognized similar requirements from other departments and suggested bundling. By coordinating the procurement of a total of 120 devices, the company was able to realize a 15% volume discount and reduce the processing time by 60%.
- Automatic detection of bundling potential
- Reduction in processing time from 5 to 2 days
- Cost savings of 15% through volume discounts
Current developments and effects
Digitalization is fundamentally transforming traditional demand reporting processes. Artificial intelligence and automated systems are revolutionizing the way companies record and process requirements.
AI-supported demand forecast
Modern AI systems analyze historical demand patterns and forecast future requirements. Machine learning algorithms recognize recurring requirements and proactively suggest orders.
- Automatic detection of seasonal fluctuations in demand
- Predictive analytics for critical materials
- Intelligent demand bundling based on data analysis
Mobile demand reporting and self-service
Mobile applications enable the spontaneous recording of requirements directly at the workplace. Self-service portals reduce the administrative effort and speed up the entire process considerably.
Integration into digital supply chains
Demand reports are increasingly being integrated into digital supply chain systems. Real-time visibility and automated communication with suppliers create new efficiency potential and improve security of supply.
Conclusion
Requirement notifications form the foundation of efficient procurement processes and enable strategic purchasing decisions. Digital systems and AI-supported solutions are revolutionizing traditional processes and creating new efficiency potential. Companies that invest in structured requisition processes achieve measurable cost savings and improve their competitiveness in the long term. The continuous optimization of these basic processes is crucial for the success of modern procurement organizations.
FAQ
What is the difference between a requirement notification and a purchase requisition?
A notification of requirements documents the basic need for goods or services, while a purchase requisition already specifies concrete suppliers and conditions. The notification of requirements is at the beginning of the procurement process, the purchase requisition follows after supplier selection and negotiation.
What information must a complete notification of requirements contain?
A complete purchase requisition includes detailed product specifications, required quantities, desired delivery dates, budget, cost center, intended use and technical requirements. The more precise this information is, the more efficient the downstream procurement process can be.
How can digital systems improve the requisition process?
Digital requisition systems automate validation processes, integrate approval workflows and provide a real-time overview of processing statuses. They reduce throughput times by up to 40%, minimize errors through automatic plausibility checks and create transparency across the entire procurement process.
What risks arise from insufficient demand reports?
Incomplete or late purchase requisitions lead to delays, additional costs and suboptimal procurement decisions. They prevent effective demand pooling, make strategic supplier negotiations more difficult and can necessitate emergency procurements with higher costs. Systematic processes and training minimize these risks considerably.
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