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Alternative procurement: definition and important aspects for buyers
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Alternative procurement in a nutshell:
Alternative procurement refers to the systematic identification and qualification of alternative sources of supply or substitute products for critical materials and services. For purchasing, this is an essential tool for minimizing risk and improving the negotiating position with existing suppliers.
Example: An automotive supplier develops two new suppliers for critical electronic components within 6 months and thereby reduces its dependency on the main supplier from 100% to 60%, while at the same time reducing procurement costs by 12%.
Contents
Alternative procurement: efficient and cost-effective purchasing
What is alternative procurement?
In purchasing, alternative procurement refers to the strategy of identifying and using alternative suppliers, materials or products in order to reduce dependencies and increase security of supply. By including alternatives, companies can react more flexibly to market changes, supply bottlenecks or quality problems and minimize their procurement risks.
Core elements of alternative procurement
Significance for purchasing
Alternative procurement is essential for modern purchasing in order to minimize risks in the supply chain and remain competitive. It enables supply gaps to be closed, costs to be reduced and innovation potential to be exploited. By diversifying procurement sources, buyers can react to volatile markets and achieve strategic advantages.
Implementation of alternative procurement
Alternative procurement is implemented through the targeted search for and integration of alternative suppliers or products. This enables companies to react more flexibly to market changes and increase security of supply.
Case study: Diversification of a raw materials supplier
A production company is heavily dependent on a single steel supplier. Due to rising prices and delivery delays, the purchasing department is looking for alternatives. They identify a second supplier from a neighboring country that offers comparable quality at competitive prices. A supply agreement is reached through contract negotiations. The company now purchases steel from both suppliers and can therefore react better to price and delivery fluctuations, save costs and stabilize production processes.
Evaluation and strategic findings
✓ Critical success factors
→ Systematic market analysis: continuous monitoring and evaluation of potential alternative suppliers and materials
→ Quality assurance: Establishing robust processes for qualifying new suppliers and materials
→ Risk management: a balance between cost savings and security of supply
⚠ Challenges
→ Technical complexity: Ensuring the compatibility of alternative materials and components
→ Supplier development: building and maintaining new supplier relationships requires time and resources
→ Cost management: Initially higher investments for qualification and integration of new sources of supply
Future trends and strategic implications:
"Alternative procurement is developing from a pure risk minimization strategy into a strategic competitive advantage."
→ Digitized supplier search and evaluation
→ Increased regional diversification of supply chains
→ Integration of sustainability criteria in alternative procurement
→ Development of flexible, modular product designs for simplified component replacement
Conclusion on alternative procurement
Alternative procurement is an indispensable strategic instrument of modern purchasing. It not only enables companies to minimize procurement risks and dependencies, but also creates competitive advantages through cost savings and innovation potential. Success lies in systematic implementation, careful supplier selection and continuous market observation. Despite initial challenges and investments, the long-term benefits for the company's security of supply and flexibility outweigh them.
