SME Procurement and its importance for the manufacturing industry are still underestimated. Low sales power and a lack of personnel in the purchasing departments of small and medium-sized companies often lead to the assumption that they have to adapt to their suppliers and global commodity prices. 

However, the purchasing department has an unexpectedly high level of leverage in the Procurement industrial mid-sized companies , which is too often ignored. After all, direct material costs and purchased services account for around 50% of company costs on average, making them one of the main cost drivers.

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Rising inflation, global shortages of raw materials and other trouble spots are creating completely new challenges for industrial mid-sized companies , which are not exactly making life any easier for buyers. So why deal with strategic issues in the current situation, when there seems to be no end to the working day?

Do I really need a strategic department in my Procurement department?

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Especially in times of supply bottlenecks, raw material shortages and tense global markets, many mid-sized companies can no longer afford to forego a strategic orientation of their purchasing activities. Due to limited resources, personnel problems and time constraints, SMEs are already facing enough challenges to make it difficult to deal with other issues.

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However, integrating a strategic component into a purchasing department does not usually require a separate department: it is often sufficient to train existing employees who carry out important operational work in strategic topics. In addition to the Chamber of Industry and Commerce, the BME and a number of private providers also offer training courses and seminars on strategic thinking, negotiation skills and the use of selected tools in your own purchasing department.

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There is now a whole range of digital tools that can take on important work in strategic Procurement . Some are even specially tailored to the needs of strategic procurement in SMEs and can be integrated into existing systems without a long implementation time.

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Simplify strategic Procurement with Tacto

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Core tasks of the strategic buyer

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In contrast to operational Procurement , strategic Procurement actively engages with suppliers, tries to optimize services and find potential savings in the supply chain. The tasks are diverse in nature and can vary depending on the industry. The core tasks can be divided into three sub-areas.

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Supplier management and market analysis

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One focus of the strategic buyer's work is to actively engage with the company's suppliers and subcontractors. However, this work is not limited to the consideration of quantitative delivery data and price developments, but rather serves the long-term maintenance of good relationships. The supplier is symbolically taken by the hand by the strategic buyer and informed about the company's long-term goals and plans with regard to growth and development. 

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On the one hand, the focus is naturally on optimization and consultation with regard to short-term stability, costs and quality. On the other hand, however, the main aim is to associate the company name with a face with whom a relationship can be established. Long-term, good contacts often pay off twice or three times over, especially in times of crisis.

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Active product group management 

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Category management is based on the idea of managing Categories as strategic business units. Several items can be grouped into logical sub-areas that are similar based on a common characteristic (e.g. intended use or origin). 

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Active category management offers strategic buyers the opportunity for companies and suppliers to work together efficiently in order to optimize the Categories with combined expertise and not get lost at item level.

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This creates a purchasing structure that is better tailored to the wishes and needs of the company. In practice, this also increases added value and profits.

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Reporting to management and involvement in production decisions

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Procurement is the area of the company with the most cross-departmental and external interfaces. A strategic buyer must coordinate with several departments at the same time and maintain an overview.

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Strategic Procurement combines methods of data collection, spend analysis and market research in order to gain an overview of all relevant markets. The insights gained are incorporated into the decision-making process. This makes it necessary for the information gathered to be passed on to all decision-makers in order to find the best possible solution for both the strategic, long-term oriented management and the relevant production and planning departments. The purchasing strategy must be aligned with the company's overall strategy so that it can then be implemented quickly and efficiently in operational Procurement .

Mid-sized Procurement and its importance for the manufacturing industry are still underestimated. Why strategic Procurement also makes sense for mid-sized companies .