In a large number of companies, the situation is similar along the purchasing process. From the request to the actual procurement, numerous departments must be involved, regulations must be observed and conflicts of interest must be overcome.
The people involved are often overwhelmed by the multitude of systems and rules, so that the procurement of critical products and services is unnecessarily delayed or guidelines are completely circumvented - in view of the difficult supply chain situation and upcoming regulations such as the Supply Chain Act, speed and implemented compliance count more than ever before!
We have learned from more than 80 interviews what the biggest sources of errors and solutions are for German companies and have summarized them for you here.
Purchasing describes a very special process in every company. On the one hand, there are the specialist departments, which want their own requirements to be procured as quickly and accurately as possible. On the other side is purchasing, which is incentivized for process reliability, compliance and low costs. In addition, there are numerous other stakeholders from other areas, such as IT, legal, controlling, etc.
In order to bring all these people together, complex processes and sets of rules are often set up. Value limits, material groups, cost centers, ... define work steps and the most diverse systems are supposed to convey the feeling of a digital and managed process. At the end of the day, however, there are lengthy discussions, avoidable work loops and a lot of frustration among those involved.
We have summarized the most common mistakes in a top 3 list:
1. Involved too late: The purchasing and approval process is characterized by an asymmetrical level of information among the people involved. Requesters know the need best, but cannot or are not allowed to order independently. Approvers as well as purchasing are responsible for proper procurement, but are not on the same level of knowledge of the demanders. This disbalance is additionally strengthened by current systems, since the information documentation is often insufficiently covered (= calls and Mails cannot be seen from the outside any longer) and relevant persons are involved too late (= approvers are merged after the purchase was already merged and complex work was accomplished).
2. No intuitive guidelines: There are often many rules - but how to know them all? Requesters are often confronted with this question with every new request and are overwhelmed. It should not be the responsibility of the requisitioner to have the purchasing rules ready by heart - that is time-consuming and ineffective. At a time when you can plan vacations and write essays with an AI, there should be easier ways to turn complex sets of rules into a simple, guided process.
3. Complex system landscapes: In the same number as there are rules, there are also various tools and systems in German companies. Whether categorized by commodity group, catalog vs. non-catalog, master agreement, or products vs. services, German companies are dominated by isolated solutions that operate stand-alone without common interfaces. Again, the question arises - how should I as a requester actually find my way around here? Mostly not at all. What starts out as a good initiative with the introduction of a new tool often leads to a complex system landscape that repeatedly frustrates requesters as well as approvers and purchasing.
The problems are now obvious. But how can companies now transform their purchasing processes to enable truly efficient collaboration?
At Lhotse, we see a flexible, easy-to-integrate workflow manager at the heart of this solution. Through a quick setup, we enable our customers to intuitively map complex approval loops, review steps, tasks such as supplier reviews for the LkSG, in one central tool. Easy integration with other systems such as the ERP system, MS Teams, Unite Mercateo, DocuSign or Jira allows the existing isolated applications to be merged into a compressed, intuitive workflow.
A process that always gives the requester full transparency over their own purchase requisition and reaches other stakeholders in a timely manner and through the right channels.
