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Controlling in purchasing: definition & important aspects for buyers
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Controlling in a nutshell:
Controlling is a systematic process for planning, managing and monitoring all procurement-relevant key figures and processes. For purchasing, it enables the continuous monitoring of purchasing performance, cost development and supplier performance as well as the early identification of optimization potential.
Example: A medium-sized company implements a monthly purchasing controlling dashboard that makes key figures such as savings (€2.3 million in the last quarter), delivery reliability (95%) and maverick buying rate (currently 8%) transparent and enables rapid action through automatic alerts in the event of deviations.
Contents
Controlling in purchasing
What is controlling in purchasing?
Controlling in purchasing refers to the systematic planning, management and control of all purchasing-relevant processes and activities. Controlling methods and instruments are used to organize purchasing efficiently, reduce costs and achieve corporate goals. The focus is on providing decision-relevant information through key figures and analyses in order to develop an optimal procurement strategy.
Core elements of purchasing controlling
Significance for purchasing
Effective controlling in purchasing is essential in order to realize cost savings and secure competitive advantages. It enables a transparent presentation of purchasing performance and promotes well-founded decisions in supplier selection, price negotiations and risk management. By continuously monitoring and optimizing processes, purchasing controlling makes a significant contribution to the company's added value.
Whitepaper: Controlling in purchasing - key figures and best practices for strategic purchasing decisions
Application of purchasing controlling: Efficient supplier selection
Systematic controlling enables buyers to evaluate and select suppliers in order to reduce costs and increase quality. Key figures such as price level, delivery reliability and quality quota are analyzed in order to make well-founded decisions.
Calculation example for supplier evaluation
A company compares two potential suppliers for an important component: Supplier A:
- Price per unit: 50 €
- Delivery reliability: 95% on time
- Quality rate: 98 % error-free deliveries
Supplier B:
- Price per unit: 47 €
- Delivery reliability: 85% on time
- Quality rate: 92 % error-free deliveries
The purchaser calculates the expected total costs for an order of 1,000 units:
Supplier A:
Price: 1,000 units x € 50 = € 50,000
Additional costs due to late delivery (5% shortfall): €50,000 x 5% = €2,500
Additional costs due to quality defects (2 % rejects): 1,000 units x € 50 x 2 % = € 1,000
Total costs supplier A: 53,500 €
Supplier B:
Price: 1,000 units x € 47 = € 47,000
Additional costs due to late delivery (15% shortfall): €47,000 x 15% = €7,050
Additional costs due to quality defects (8 % rejects): 1,000 units x € 47 x 8 % = € 3,760
Total costs supplier B: 57,810 €
Through controlling, the buyer recognizes that despite the lower unit price, supplier B causes higher total costs. Supplier A is therefore selected, resulting in a cost saving of €4,310.
Evaluation and strategic findings
✓ Critical success factors
→ Holistic cost analysis: integration of all relevant cost factors as demonstrated in the supplier comparison
→ KPI framework: Establishment of a balanced set of KPIs for costs, quality and delivery performance
→ Process automation: implementation of automated reporting systems for timely decisions
⚠ Challenges
→ Data quality: Ensuring consistent data entry across all departments
→ Maverick buying: reduction of 8% through improved process controls
→ Performance measurement: development of meaningful metrics for aspects that are difficult to quantify
Future trends and implications:
"The evolution from pure cost controlling to strategic performance management"
→ Predictive analytics for demand forecasts
→ AI-supported supplier evaluation
→ Real-time monitoring of supply chains
→ Integration of sustainability KPIs
◆ Strategic recommendations for action
→ Investment in digital controlling tools to automate reporting
→ Development of a change management program to promote data culture
→ Development of a balanced scorecard approach for purchasing
Conclusion on supplier evaluation in purchasing controlling
Purchasing controlling is an indispensable tool for the strategic management and optimization of procurement processes. The systematic analysis of key figures, as demonstrated in the supplier comparison, enables well-founded decisions and significant cost savings. Through the integration of modern technologies and the consideration of all relevant cost factors, controlling is increasingly developing from a pure cost monitor to a strategic partner of purchasing. Success lies in the balance between effective cost control, quality assurance and future-oriented development of procurement processes.
