Procurement as a
service

Harihar

In today’s manufacturing landscape, procurement teams are under increasing pressure to reduce costs, optimize supply chains, and manage vendor relationships efficiently. For mid- to large-sized manufacturing companies, sourcing — particularly for indirect materials — often becomes a complex, time-consuming process that can divert valuable resources from core strategic tasks.

This is where Procurement as a Service (PaaS) offers a powerful solution.

The Procurement Challenge

Sourcing is generally categorized into two broad areas:

Direct Procurement: Items that directly go into the Bill of Materials (BoM) — raw materials, components, subassemblies, etc. These are mission-critical and contribute to a significant portion of the total procurement spend.
Indirect Procurement: Items that support operations and infrastructure — such as consumables, spare parts, office supplies, IT hardware, MRO (Maintenance, Repair & Operations) products, testing tools, packaging, safety gear, and more.

While indirect materials account for a smaller share of total procurement cost, they come with a high degree of complexity: too many SKUs, multiple vendors, low order values, and frequent one-off purchases. Managing this tail-end spend becomes a major drain on internal sourcing teams.

The PaaS Solution: Outsourcing Indirect Procurement

Procurement as a Service allows organizations to outsource the entire indirect procurement function to a dedicated, third-party integrator — acting as an extended sourcing arm of the company. This strategic move helps simplify processes and drive efficiencies.

Key Functions Outsourced Under PaaS:

Vendor discovery and qualification
Quote collection and comparison
Order placement and follow-up
Import coordination for spares/accessories
Inventory replenishment and reordering
Invoice validation and payment tracking

By outsourcing these functions, companies can reduce internal effort on low-value, high-volume transactions, while ensuring availability, compliance, and control.

Business Benefits of PaaS

Free Up Internal Resources: Focus sourcing talent on high-impact direct procurement and vendor strategy.
Cost Reduction: Benefit from economies of scale, negotiated pricing, and better process controls.
Improved Lead Times: Accelerate delivery of indirect items with professional follow-ups and scheduling.
Consolidated Vendor Management: Reduce the number of active vendors and streamline procurement processes.
Enhanced Spend Visibility: Real-time analytics and reporting improve tracking and control of indirect spend.
Flexibility: Scale your procurement bandwidth without increasing headcount.

Ideal for Modern Manufacturing Environments