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Indirect procurement: definition & important aspects for buyers
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Indirect procurement in a nutshell:
Indirect procurement covers the purchase of all goods and services that are not directly incorporated into a company's end product. This represents an important cost-cutting lever for purchasing, as indirect materials often account for 20-30% of the total procurement volume.
Example: An automobile manufacturer procures office supplies, IT equipment and facility services worth 50 million euros annually via indirect procurement, whereby the introduction of category-based management and the consolidation of the supplier base resulted in cost savings of 15% within 12 months.
Contents
Introduction to purchasing controlling: Indirect procurement
What is indirect procurement?
Indirect procurement refers to the purchase of goods and services that are not directly involved in the manufacture of an end product, but are essential for the day-to-day operations of a company. This includes, for example, office supplies, IT equipment, services such as cleaning or consulting and marketing materials. While direct procurement includes raw materials and components for production, indirect procurement focuses on goods and services that support business operations.
Core elements of indirect procurement
Significance for purchasing
Indirect procurement plays a key role in optimizing costs and efficiency in companies. By strategically managing these procurement processes, significant savings can be realized and transparency increased. An effective approach to indirect procurement helps to minimize risks, improve supplier relationships and manage the overall performance of purchasing.
Implementation of an effective indirect procurement strategy
By centralizing and standardizing indirect procurement, companies can reduce costs and optimize processes. A strategic approach makes it possible to bundle requirements, consolidate suppliers and create more efficient processes.
Case study: Optimization of service procurement
A multinational company found that different departments had redundant service contracts for IT support, cleaning and maintenance. Each department had separate contracts with different providers, resulting in higher costs and inconsistent service levels.strategic application:
1. needs analysis: The procurement team carried out a company-wide analysis to identify all service requirements.
2. supplier consolidation: instead of several suppliers, a small number of strategic partners were selected who can cover several services.
3. negotiation management: Higher volumes meant that better conditions and uniform service levels could be agreed.
4. implementation of framework agreements: Standardized contracts for all locations ensured transparency and simplified management.
Result: The company was able to reduce the cost of these services by 25%, improve service quality and reduce administrative costs. Indirect procurement thus became a strategic lever for efficiency and cost savings.
Evaluation and strategic findings
✓ Critical success factors
→ Process standardization: introduction of uniform procurement processes across all departments for maximum efficiency and cost control
→ Stakeholder management: early involvement of all stakeholders to ensure acceptance of new procurement strategies
→ Digitalization: Implementation of e-procurement solutions for the automation of repetitive processes
⚠ Challenges and limitations
→ Decentralized structures: overcoming departmental silos and individual procurement practices
→ Complexity management: mastering the high number of ordering processes and supplier relationships
→ Change resistance: overcoming resistance to centralized procurement processes
Future trends and strategic implications:
"The transformation of indirect procurement from an administrative to a strategic value driver"
→ AI-supported demand forecasts and automated procurement processes
→ Increased integration of sustainability criteria in procurement decisions
→ Development towards Category Management 4.0 with data-driven decisions
→ Development of strategic supplier partnerships for innovations in indirect purchasing
Conclusion on indirect procurement
Indirect procurement is increasingly evolving from an operational necessity to a strategic success factor. Through systematic process optimization, digitalization and centralized control, companies can achieve significant cost savings and increase their efficiency. The key to success lies in the balance between standardization and flexibility as well as the consistent involvement of all stakeholders. Modern technologies and sustainable procurement strategies will play a key role in shaping the future of indirect procurement.
