The sourcing guide for medium-sized purchasing companies
published on
4.11.2024
In an increasingly dynamic and globalized world, medium-sized industrial companies face numerous challenges in purchasing: Rising commodity prices, volatile markets and growing demands for sustainability and compliance. According to a special survey by the KfW SME Panel, 80% of all small and medium-sized enterprises expect further cost increases.
Strategic sourcing is the key not only to reducing costs, but also to increasing security of supply and building a resilient supply chain. This sourcing guide offers practical strategies and shows step by step how you can make purchasing a key success factor for your company in the industrial SME sector.
On average, material and service costs account for around 50% of company costs, making purchasing one of the main cost drivers. Here, targeted procurement strategies offer enormous leverage to control costs and ensure long-term competitiveness. Strategic sourcing goes beyond mere price negotiations: it includes the selection of optimal suppliers, the establishment of long-term partnerships and the implementation of sustainability and compliance requirements. This is confirmed by the PwC Digital Procurement Survey 2024, according to which procurement is the second most important strategic priority in purchasing after purchasing performance.
In the modern business world, especially in industrial purchasing, ERP systems are reaching their limits. Although they are essential for handling operational processes, they cannot provide sufficient support in terms of strategic supplier management. These are the greatest weaknesses of an ERP system, which illustrate the need for SRM (Supplier Relationship Management):
1. needs analysis and target definition
Every sourcing process begins with a clear needs analysis. Here, the requirements for materials and services are recorded in detail and the overarching objectives of sourcing are defined - be it cost reduction, ensuring high quality standards, flexibility or sustainability.
2. supplier research and market analysis
A thorough market analysis is essential in order to identify potential suppliers at home and abroad and compare their offers. This involves examining prices, capacities, quality standards and geographical proximity in order to build up the optimum supplier base. Market trends, technological innovations and price fluctuations provide important insights and support the selection of suitable suppliers.
3. supplier selection and qualification
The next step is to define clear evaluation criteria such as price, quality, delivery reliability and sustainability. The financial, production-specific and legal requirements of potential suppliers can be checked through a comprehensive due diligence process. Supplier visits and audits ensure that the supplier's standards meet the company's requirements.
4. negotiation strategy and contract drafting
Negotiations are a key step in achieving the best possible conditions with the selected suppliers. This is where prices, payment terms, delivery times and contract terms are defined. In addition to delivery deadlines and quality standards, important contract contents also include penalties for non-compliance and special clauses for adapting to market developments. Security of supply can also be ensured through alternative sources of supply and escalation processes.
5. implementation and logistics planning
Implementation includes the definition of specific requirement quantities and delivery times, which are crucial for smooth supply and correct warehousing. Clear logistics planning defines whether transport is organized by the supplier or by the company. This ensures efficient coordination of the entire supply chain.
6. supplier integration and relationship management
Successful sourcing does not end when the contract is signed. Structured onboarding and transparent communication create the basis for a long-term partnership. Maintaining a trusting relationship is essential in order to be able to react jointly to changes in requirements and challenges. Regular training and clear standards ensure the quality of the collaboration.
7. performance monitoring and continuous improvement
Regular monitoring of supplier performance using KPIs such as delivery reliability, quality level and response time makes it possible to identify optimization potential. Systematic feedback helps to continuously improve the supplier's performance. If market conditions or company goals change, it is advisable to adjust the contracts in order to ensure the long-term stability of the supply relationship.
The choice of the right sourcing strategy depends on the specific requirements and strategies of the company. Here is a brief overview of common strategies:
Today, compliance and sustainability are essential components of a successful sourcing process. Companies are increasingly responsible for ensuring compliance with environmental and social standards in their supply chain. Strategic sourcing makes it possible to implement sustainability requirements in a targeted manner and minimize compliance risks. This not only strengthens the company's image, but also ensures that legal requirements such as the Supply Chain Duty of Care Act are met.
A well-thought-out sourcing process is crucial in order to develop purchasing in medium-sized industrial companies into a strategic strength of the company. By carefully selecting and managing suppliers, purchasing managers can not only reduce costs, but also strengthen the resilience of the supply chain and secure long-term competitive advantages.
Download the Sourcing Guide to optimize purchasing in your company in a targeted manner and fully exploit strategic potential.
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