Frequently asked questions
INNOSourcing has been successfully operating procurement pooling for over 20 years - what exactly do you mean by this?
INNOSourcing has specialised in procurement of indirect material (products for maintenance, servicing and operations as well as administrative areas) and services. By pooling procurement volumes across customers, all can benefit from attractive conditions. With more than 100 framework agreements with renowned suppliers, almost all commodity groups are covered. The goal is to achieve continuous and sustainable process and cost optimisation. This “partial outsourcing” of indirect material and services to INNOSourcing allows customers to focus on their individual core competencies and thus significantly reduces their workload.
In addition, INNOSourcing supports various public and private institutions, colleges and universities in strategic procurement as well as in individual procurement projects.
What advantages does this cross-company procurement pooling or membership offer to customers?
That depends very much on the company. The focus is certainly on the monetary advantage as well as the relief and support of the employees who procure the respective commodity groups. An additional benefit is the open exchange of knowledge and experience among members, which saves time and helps to avoid damage. This in the spirit of “one for all, all for one”.
What benefit does this cross-company purchasing pooling or membership bring to suppliers?
The suppliers achieve a larger market share and better market penetration with the support of INNOSourcing, as well as stronger customer loyalty through the long-term orientation of the network partnerships. In addition, INNOSourcing acts as the “single point of contact”.
In addition to the INNOPool, INNOSourcing now also offers the K-Pool. What is the difference between these offers?
The aim is to enable smaller companies to benefit from the advantages of membership. Especially in these currently difficult times, optimising costs plays a very central role for medium-sized companies. With the K-Pool, we offer a smaller but nevertheless balanced range of products and services at reduced fees, which is geared towards samll and mid-size enterprices (SMEs).
What requirements do companies have to fulfil to join the INNOPool or K-Pool procurement network?
Openness, readiness for change and the will to cooperate are the basic requirements. This means explizit that members delegate activities such as tenders, price negotiations and strategic supplier support in defined commodity groups. Furthermore, members can benefit from sharing knowledge and experiences with each other. This leads to active networking and a lot of mutual support. In addition to considerable commercial benefits, the company generates broad-based knowledge and frees up resources for other more important procurement issues. Another prerequisite is that the management actively supports the membership within the company and that there is penetration into the individual departments.
Is joining the K-Pool also worthwhile for small companies? What is the minimum size or procurement volume?
It is not primarily the purchasing volumes that matter, but the potentials that result from a membership. This varies greatly from case to case. For companies with 50 – 80 employees or more, an analysis is worthwhile (depending on the volumes in the individual commodity groups). Prior to a membership, the respective potentials and opportunities for improvement are examined in detail with the interested company. This procedure has proven very successful and gives both parties a clear basis for decision-making.
Are there sectors in which joint procurement makes particular sense?
The synergies are greatest in the areas of “indirect materials and services”, where the industry plays a subordinate role. Members participating in the INNOPool or the K-Pool usually have procurement volumes in areas such as IT/telecommunications, facility/maintenance, travel, logistics, energy, tools/machinery and mobility – just to name a few examples. In principle, these expenses are sector-neutral. In the case of “direct material”, however, the industry and the end product have a very strong influence.
What kind of suppliers "serve" the procurement networks and how must they be set up?
We focus on notable suppliers with high-quality products and services. Helpful are a well-established settlement management as well as openness and willingness to provide our members with attractive commercial conditions as well as good tools and services and to look after them as A-customers.
What does membership mean and what obligations does a company enter into?
Members are expected to actively participate in pooling agreements, projects and the exchange of experience within the networks on a long-term basis wherever it is economically viable. The obligations in the individual pooling contracts are regulated individually and per supplier.
In principle, there is no “obligation” for members to participate in projects, exchanges or other activities. Here, however, the question of meaning arises: “why are we network member if we are not participating anywhere”. The level of activity ultimately determines the level of commercial benefits and resource savings in procurement activities that a company can achieve with a membership.
Does INNOSourcing offer other services besides pooling?
In order to be able to fully support our members, we also offer – as well as to all interested companies that do not belong to one of our procurement networks – professional and customer-oriented advice/service on all issues related to procurement and cost management as well as digital tools & services.
Why is the exchange of experience (ERFA) becoming increasingly important?
The exchange among members at ‘ERFA meetings’ (exchange of experience and knowldge) has proven itself and is very much appreciated. Various areas, such as the procurement managers in the Supply Management Excellence (SME Group), the IT managers, facility managers or travel managers meet regularly to exchange experiences. Furthermore, participants support each other individually with problems and share their experience in a confidential environment. The INNOForum platform, which is available to all members, also offers the opportunity for exchange. Moreover, most of the members have known each other for many years.