Introduction: Joint procurement strengthens small and medium-sized enterprises: by pooling procurement volumes, it is possible to secure better prices, terms and greater supply reliability. This blog post outlines the main forms of collaboration, explains when pooling is economically viable, and sets out what to bear in mind when implementing it.

Purchasing pooling refers to the strategic consolidation of the procurement volumes of several companies in order to jointly negotiate better purchasing terms. This pooling results in larger purchase volumes, which lead to volume discounts, improved payment terms and preferential treatment from suppliers.

For medium-sized enterprises, this form of cooperation offers significant advantages over purchasing on their own. Whilst large corporations already have the necessary volume, smaller companies can considerably increase their market power through purchasing cooperatives. This not only leads to direct cost savings, but also to greater supply reliability and better risk mitigation.

The fundamental principles are based on the pooling of market power, shared resources for supplier management and coordinated procurement strategies. In volatile markets in particular, this enables small and medium-sized enterprises to stabilise their supply chain whilst benefiting from more professional procurement processes.

What types of procurement partnerships are available to medium-sized businesses?

Medium-sized enterprises can choose between various forms of cooperation, which differ in terms of structure and intensity. Horizontal alliances bring together companies in the same sector, whilst vertical cooperation takes place along the value chain.

Purchasing consortia represent the traditional model, whereby companies set up joint procurement organisations or join existing groups. These coordinate tenders, negotiate framework agreements and share market information.

Strategic alliances go a step further and involve long-term partnerships with joint supplier development and coordinated procurement strategies. Industry-specific alliances focus on specific groups of materials or services that are relevant to particular industries.

Another form is project-based collaboration, in which companies work together on a temporary basis for specific procurement projects. These arrangements offer flexibility without long-term commitments and are particularly suitable for capital goods or seasonal procurement.

Procurement consolidation in small and medium-sized enterprises: When partnerships are worthwhile

When does consolidating purchases make financial sense?

The economic assessment of consolidated procurement depends on several measurable factors. The minimum volume plays a crucial role: typically, consolidated procurement volumes should be at least three times the individual volume in order to achieve significant savings. The break-even analysis must take into account both direct cost savings and coordination costs. Experience shows that savings of between five and fifteen per cent are realistic for standard materials, whilst smaller savings are to be expected for specialised products.

The cost structures of the participating companies should be similar in order to enable fair allocation models. Companies with significantly differing requirements or quality standards make joint procurement considerably more difficult.

A sustainable ROI is achieved through the continuous optimisation of collaborative structures and regular adaptation to market changes. Soft factors such as improved supply reliability and risk minimisation also play an important role in the overall assessment.

What challenges arise when implementing procurement partnerships?

The effort involved in coordination often presents the greatest practical hurdle, as different business processes, systems and decision-making structures need to be synchronised. This requires clear governance structures and defined lines of communication between all parties involved. Differing quality requirements and specifications can lead to compromises that do not optimally serve all partners. Companies must be prepared to deviate from their individual standards or to accept additional complexity in procurement.

Legal aspects include competition law provisions, liability issues and the drafting of contracts between the cooperating parties. Competition law restrictions must be observed, particularly in the case of dominant market positions.

Building trust between competitors or companies from different sectors takes time and transparent communication. Managing complex partnership structures requires professional facilitation and clear rules for decision-making and conflict resolution.

How do medium-sized companies find the right partners for joint procurement?

Identifying partners begins with analysing one’s own procurement portfolio and defining suitable material groups for collaboration. Trade associations, chambers of commerce and industry, and specialist consultancy firms can provide valuable contacts.

Evaluation criteria for potential partners include volume compatibility, similar quality requirements, geographical proximity and cultural fit. The financial stability and reliability of partner companies are fundamental prerequisites for successful long-term collaborations. Due diligence processes should examine not only financial indicators but also procurement processes, supplier relationships and the strategic direction of potential partners. Reference projects and previous experience of collaboration provide insight into a partner’s ability to collaborate.

Trust-based business relationships are built up gradually through smaller pilot projects before full-scale partnerships are established. Regular performance reviews and open communication about challenges strengthen the partnership in the long term and lay the foundations for expanded collaboration within the supply chain, as well as a sustainable increase in procurement efficiency.

ADCONIA – Out of the ordinary.

Consulting for purchasing, supply and value chains with a focus on cost management, digitalisation, organisational development and sustainability