Initial Situation
The strategic procurement team of an industrial company has invested significant time and effort into negotiating framework agreements with 15 key vendors, securing 5 to 15% off the official list prices. These framework agreements form the backbone of the indirect procurement strategy and cover all major spend categories, including MRO, C-parts, office supplies, IT accessories, and personal protective equipment.
In daily operations, however, the negotiated potential remains largely untapped. Employees regularly order from non-contracted vendors, partly out of habit, partly out of pure lack of awareness about which agreements exist for which categories. Without active steering inside the procurement system, only 60% of all orders actually flow through the framework agreements. The remaining 40% leak into uncontrolled side channels and miss the negotiated discount structure entirely. The wasted savings potential is conservatively estimated at €180,000 per year, hitting the EBIT line directly. On top of that, procurement leadership lacks reliable data on vendor performance and cannot renegotiate effectively at contract renewal.
Your Solution with simple system
simple system makes framework agreements the path of least resistance through the Marketplace and Controlling modules. Contract vendors are systematically prioritised, off-contract orders are visibly flagged or blocked, and procurement leadership gains real-time visibility into framework adoption across every plant and cost centre.
- Assortment restrictions: contract vendors are prioritised, while non-contracted vendors can be restricted per user, group, or globally.
- Article information: contract articles are clearly marked with a dedicated „Framework Agreement" badge inside the core assortment.
- Unit price limits: Any order placed above the negotiated contract price is automatically blocked at the cart stage.
- Genehmigungsprozesse: Orders from non-contract vendors require a justification and explicit approval before they leave the system.
- Real-time analytics on framework adoption per category, vendor, and location, ready for renegotiation rounds.
Result
Framework agreement adoption rises from 60% to 95% within a few months of rollout. Negotiated terms are actually utilised across all locations, vendor performance becomes measurable continuously, and the next round of negotiations starts from a much stronger data foundation.
Your Benefit
- Time savings: automatic framework agreement enforcement eliminates manual monitoring, spot checks, and retrospective spend analysis.
- Measurable EBIT impact of around +€105,000 per year: 10% price advantage applied to roughly 35% additional contract usage on €3 million of indirect spend.
