The less binding, the better
In the private sphere, it is well known that long contractual terms are not particularly popular. Whether it is an insurance, mobile phone or fitness studio: the less binding, the better. The situation is entirely different in the business sector: business partners like to enter into long-standing relationships with one another with the same constant conditions. This facilitates a certain planning certainty for both sides, for instance with regard to sales volume and price.
Such contracts with suppliers should of course be checked at regular intervals and, if necessary, renegotiated. But this is extremely time-consuming and depending on the required volume of a product or a service, successful negotiations are difficult, for instance, due to a temporarily low volume. That is why INNOSourcing GmbH was launched in 1998. As the office of the purchasing network INNOPool, it optimises the procurement management for its members. It primarily involves products or services that every company requires to operate. So for instance, office material, IT components or also rental cars. In total, INNOSourcing GmbH has around 100 framework agreements with suppliers from diverse sectors.
"When we negotiate conditions for our more than 60 members in the INNOPool, the aim is to achieve the best possible price and streamlined processes with the pooled volume," explains Daniel Gründler, who acts as the project manager at INNOSourcing. The negotiation position of a purchasing network is substantially better than that of the individual customers due to the larger purchase volume. However, depending on the product or price, even a purchasing network cannot negotiate a price guarantee over a period of years. "Ultimately, everybody is in the same boat. If, for instance, the prices for raw materials go through the roof due to certain global developments or raw materials become scarce, producers and suppliers are directly affected, and that is bound to affect prices."
