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Demand notification: Definition & important aspects for buyers
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Demand reporting in a nutshell:
A purchase requisition is the formal notification from a specialist department to Purchasing of the materials, services or capital goods required. It enables Purchasing to plan procurement in a structured manner and supply internal customers in good time, taking economic aspects into account.
Example: The production department notifies the purchasing department via the ERP system of a requirement for 1,000 special screws with a lead time of 6 weeks and an estimated value of EUR 2,500, allowing the purchasing department to initiate the procurement process in good time.
Contents
What is a requirement notification?
A purchase requisition is an internal document or electronic process that employees use to officially communicate the need for goods, services or materials within a company to the purchasing department. It is the first step in the procurement process and serves to identify the specific requirement and inform the purchasing department of what is needed, in what quantity and by when.
Core elements of a requirement notification
Importance of the purchase requisition in the purchasing process
The purchase requisition is essential for an efficient and transparent purchasing process. It enables the purchasing department to record requirements centrally, obtain quotations and plan orders strategically. Clear requirement notifications make it possible to avoid duplicate orders, take advantage of quantity discounts and meet delivery deadlines.
Requirement notification: From manual processes to e-procurement
Building on the fundamental importance of the requisition as the starting point in the procurement process, it is clear in practice how crucial efficient processes are for a company's success. Traditional, manual methods often lead to delays, inconsistencies and increased workload. In view of the increasing demands for speed and precision in procurement, there is a growing need for digital solutions that overcome these challenges and transform the process.
Old: Manual recording of requirements
Traditional approach: In many companies, purchase requisitions are handled using traditional manual processes. Employees fill out paper-based forms or send purchase requisitions to the purchasing organization by email. This form of recording is time-consuming and prone to errors such as misinterpretation or loss of documents. In addition, there is often a lack of standardized procedures, which leads to inconsistencies in data quality. Manual forwarding and approval can take days or even weeks, which impairs the company's ability to respond and potentially leads to production bottlenecks.
New: Digitalization via e-procurement
E-procurement: Integrated e-procurement systems are used for the modern implementation of requirements reporting. Here, employees enter their requirements directly in a digital platform that is linked to the company's materials management system. Intuitive user interfaces, ready-made catalogs and automated suggestions increase the efficiency and accuracy of recording. Approval workflows are digitally mapped so that approvals can be made in real time. Thanks to the transparency of the platform, everyone involved has access to the status of the requisitions at all times. This digitalization leads to an average reduction in process costs of 30% and shortens the processing time for requisitions by up to 50%.
Practical example: Implementation at XYZ GmbH
XYZ GmbH, a leading company in the automotive supply industry, was faced with the challenge of optimizing its inefficient procurement processes. By introducing an e-procurement system, the processing time for purchase requisitions was reduced from an average of four days to less than one day. The error rate in requisitioning fell by 40% and the automated approval function significantly accelerated internal processes. In the first year after implementation, XYZ GmbH recorded cost savings of over 500,000 euros and increased the productivity of the purchasing department by 25%.
Conclusion on the notification of requirements
Requirement notifications are an indispensable tool for an efficient and transparent procurement process. They not only structure the purchasing process, but also enable strategic planning and cost control. Success depends largely on digital integration, standardized processes and the quality of the notifications. With increasing digitalization and AI support, purchase requisitions will contribute even more effectively to the optimization of company resources.
