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Purchasing volume: definition & important aspects
Purchasing volume in a nutshell:
The purchasing volume describes the total monetary value of all goods and services procured by a company in a defined period. For purchasing, this is a key figure for evaluating purchasing power, supplier management and strategic planning of procurement activities.
Example: A medium-sized production company has an annual purchasing volume of 25 million euros, of which 60% is accounted for by direct materials, 25% by indirect materials and 15% by services.
Contents
What is purchasing volume?
The purchasing volume refers to the total quantity of goods and services that a company purchases within a certain period of time. It is a key indicator of purchasing activities and provides insights into the company's procurement behavior. The purchasing volume can be measured in various units, such as number of units, weight, volume or in monetary terms.
Why is purchasing volume important?
The purchasing volume plays a central role in several areas of purchasing management:
- Cost control: By analyzing purchasing volumes, companies can identify potential savings and negotiate better conditions with suppliers.
- Supplier management: A high purchasing volume can strengthen the negotiating position with suppliers and promote long-term partnerships.
- Requirements planning: Understanding the purchasing volume helps with precise requirements determination and warehouse management.
- Budgeting: The purchasing volume is an important factor in the preparation of purchasing budgets and financial planning.
- Performance measurement: Purchasing volume serves as a key figure for evaluating purchasing performance and identifying opportunities for improvement.
Importance of purchasing volume for companies
For buyers, purchasing volume is a fundamental key figure that covers several important aspects:
- Cost control: A clear understanding of purchasing volumes helps to monitor and control expenditure.
- Supplier management: Higher purchasing volumes can lead to better conditions and discounts, as suppliers often offer incentives for larger purchase volumes.
- Budget planning: The purchasing volume supports the creation of precise budgets and the planning of future expenditure.
- Performance measurement: By integrating the purchasing volume into key performance indicators (KPIs), the efficiency and effectiveness of the purchasing department can be evaluated.
Methods for calculating the purchasing volume
The purchasing volume can be calculated in various ways, depending on the specific requirements and data availability of a company. A common formula is:
Purchase volume = number of units ordered × price per unit
This simple calculation enables the purchasing volume to be determined quickly. However, for a more precise analysis, the purchasing volume can also be calculated taking into account other factors such as supplier prices, discounts and payment terms.
Another important key figure is the purchasing volume as a percentage of sales. This ratio provides information on how much of the generated turnover is spent on purchasing and helps to evaluate purchasing strategies in relation to company performance.
Purchasing volumes: from manual analysis to digital spend management
Based on the understanding of purchasing volume as a key performance indicator in procurement, it becomes clear how essential precise evaluations are for strategic decisions. In practice, effective management of purchasing volume enables considerable cost savings and process optimization. The transformation from traditional methods to modern approaches is therefore essential in order to meet the increasing demands for transparency and efficiency.
Old: Manual data evaluation
Traditional approach: In traditional procurement, purchasing volumes were often recorded and analyzed manually using spreadsheets and paper documents. Buyers collected data from various sources, such as purchase orders, invoices and delivery bills, and consolidated them manually. The tools were limited to simple software such as Excel or even physical file folders. This approach was time-consuming and prone to errors. In addition, the lack of real-time transparency made it difficult to react promptly to market changes and to identify potential savings.
New: Digital Spend Management
Spend management: The modern approach relies on digital solutions for the automated recording and analysis of purchasing volumes. By using specialized software solutions such as spend analytics tools, data from various systems such as ERP, e-procurement and supplier portals is merged in real time. Innovative technologies such as artificial intelligence and machine learning enable in-depth analyses and forecasts. This leads to increased transparency across all expenditure, faster decision-making processes and proactive identification of potential savings. Furthermore, dashboards and reports can be used to create customized KPIs and benchmarks that support strategic purchasing decisions.
Practical example: Automotive industry
A leading car manufacturer implemented a digital spend management system, which enabled it to centrally record and analyze its purchasing volume of over 5 billion euros annually. The real-time analysis enabled the company to reduce the number of suppliers by 15% and achieve economies of scale. economies of scale economies of scale. Within one year, the measures led to cost savings of 8% in direct material purchasing and at the same time improved supplier relationships through more transparent processes.
Conclusion
The purchasing volume is an essential key figure that goes far beyond the simple recording of expenditure. It provides in-depth insights into the efficiency and effectiveness of a company's purchasing processes and enables buyers to make informed strategic decisions. By accurately calculating and continuously analyzing purchasing volumes, companies can not only optimize their costs, but also strengthen their negotiating position and build sustainable supplier relationships. Ultimately, a comprehensive understanding of purchasing volumes makes a significant contribution to increasing a company's competitiveness and long-term success.
