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Determining requirements: definition & important aspects for buyers
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Needs assessment in a nutshell:
Determining requirements is a systematic process for identifying and quantifying the goods and services required in a defined period of time. It forms the basis for efficient procurement planning and enables Purchasing to optimally manage order quantities, delivery dates and stock levels.
Example: An automotive supplier uses production planning analysis to determine a requirement of 25,000 steel sheets for the coming quarter and plans a staggered procurement of 8,333 units per month in order to optimize storage costs and avoid production bottlenecks.
Contents
Determining requirements - principles and methods
What is the needs assessment?
Determining requirements is a central process in purchasing and refers to the systematic determination of a company's material and service requirements. It is used to determine the exact scope, quantities and timing of the required goods and services. By carefully determining requirements, a company ensures that all necessary resources are available on time and in the right quantities in order to optimize operational processes.
Core elements of the needs assessment
Significance for purchasing
Determining requirements is essential for purchasing, as it forms the basis for all procurement activities. A precise determination of requirements makes it possible to avoid excess stock, prevent bottlenecks and optimize procurement costs. It helps to ensure security of supply and increase the efficiency of procurement processes.
Implementation of the needs assessment in practice
Determining requirements enables companies to identify their exact material and service needs. Systematic analysis is used to determine quantities and timing in order to use resources efficiently and optimize costs.
Practical example
A manufacturer of electrical appliances plans production for the coming quarter. Based on the current order backlog and forecast sales figures, the buyer determines the demand for components such as microchips, housings and displays. By using a program-oriented procedure, exact quantities are calculated:1. planned sales of 10,000 smartphones
2. each smartphone requires 1 display, 1 processor and 2 memory chips
3. secondary requirements: 10,000 displays, 10,000 processors, 20,000 memory chips
The purchaser coordinates the procurement of these components with the suppliers, takes delivery times into account and negotiates quantity discounts. In this way, the company ensures material availability and optimizes procurement costs at the same time.
Evaluation and strategic findings
✓ Critical success factors
→ Precise forecasting models: development of accurate forecasting models based on historical data and market indicators
→ Process integration: close integration of requirements analysis with production, sales and supplier management
→ Flexibility: adaptable systems for rapid response to fluctuations in demand
⚠ Challenges and limits
→ Market uncertainties: Fluctuating raw material prices and supplier capacities make long-term planning difficult
→ Data quality: Incomplete or inaccurate demand data leads to misjudgements
→ Coordination effort: High need for coordination between different areas of the company
Future trends and developments:
"The digital transformation enables an increasingly automated and more precise determination of requirements."
→ AI-supported demand forecasts
→ Real-time analysis of consumption data
→ Predictive analytics for peak demand
→ IoT-based inventory monitoring
◆ Strategic implications
→ Prioritize investments in digital tools to determine requirements
→ Development of data analytics skills in the purchasing team
→ Development of flexible supplier relationships for fluctuating requirements
Conclusion on the needs assessment
Determining requirements is a fundamental process for the successful purchasing and efficient resource planning of a company. Through precise analyses, modern technologies and systematic methods, companies can optimize their procurement costs while ensuring security of supply. The increasing use of AI and digital tools will further increase the accuracy and efficiency of demand determination and thus represent a decisive competitive advantage.
