Procurement

Technical procurement involves more than just price negotiation. This Lexicon section equips you with valuable insights on sourcing strategies, supplier management, and decision-making processes—helping you make confident, informed purchasing choices.

Supplier management
The term supplier management describes the systematic management of the relationship between a company and its suppliers. Supplier management aims to optimise its own value chain economically and technically through a transparent comparison of suppliers. Supplier management has become increasingly important in recent years, as the share of external value added in German companies has steadily increased. In industry, the share of external output is now around 70%, which means that the value added to external enterprises is shifted. This shift leads to the fact that the cost-effectiveness of procurement processes offers an increasing potential for improvement.
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Contract manufacturing
The term wage production refers to the outsourcing of individual manufacturing steps or entire orders to external service providers. The model of wage production is applied across industries in a variety of areas and is also very popular in metalworking. The wage production gives the client the opportunity to assign certain services to after-contractors and thereby achieve a higher cost-effectiveness in its manufacturing processes. Capacity bottlenecks or the absence of suitable machine tools are also among the typical reasons for wage production.
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Make or buy
The term Make-or-Buy refers in the economy to the entrepreneurial decision between own production (Make) or the foreign cover (Buy). The make-or-buy decision is particularly important in industrial manufacturing processes. In principle, the question “Make or Buy?” is relevant for all activities of the company value chain. From a company-strategic perspective, the question is closely linked to the extent of the vertical integration of the company. From an operational point of view, I usually consider the outsourcing of production steps to be an economic consideration.
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Custom made part
As a part of the drawing, the metal and plastic processing industry describes a custom production. Drawing parts are produced individually for a customer, using a variety of over milling to punching and pressing. In industry, drawing parts are particularly relevant for special applications. If the customer cannot rely on a standardized standard application for his application, he applies to a contractor that can supply the desired component as a part of the drawing. In addition to a drawing, a CAD file or a pattern can also serve as the basis for production.
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Procurement

Supplier management

Contract manufacturing

Make or buy

Custom made part

Techpilot is Europe’s largest platform for the manufacturing industry.

Lexicon categories

Lexicon Themes

Supplier management

Contract manufacturing

Make or buy

Custom made part