Business Strategy
Group Procurement: How Shared Buying Cuts Costs
By ATTPL HOLDCO / ATTPL GROUP Editorial Team · · 3 min read
How group companies can pool purchasing: spend analysis, category planning, vendor selection, approvals, contracts and controls for shared procurement.
Start with a spend analysis
In many Indian business groups, each company buys its own laptops, steel, fuel, insurance and office supplies. Each negotiates separately, maintains its own vendor list and pays different prices for the same items. Group procurement brings this buying together. Done well, it lowers costs, improves quality and reduces the risk of fraud. Done badly, it slows everyone down. This guide explains how to set it up in a balanced way.
Collect twelve months of purchase data from every group company: vendor, item, quantity, price and payment terms. Group the spend into categories such as IT hardware, construction materials, vehicles and fuel, logistics, insurance, professional services and facilities. Even a simple spreadsheet usually reveals the same vendors being paid different prices, many small vendors for the same item, and categories where volume could be pooled.
Decide what to centralise
Not every purchase should be centralised. A useful rule is to centralise categories that are common across companies and large in value, and to leave specialised or urgent purchases with each business.
- Good candidates for central buying: IT equipment and software licences, insurance, travel, fuel cards, office supplies, logistics contracts and common raw materials.
- Better left local: highly specialised project materials, small urgent repairs and items unique to one business.
- Hybrid: the centre negotiates a rate contract, and each company places its own orders against it.
Choose and evaluate vendors properly
For each central category, invite quotations from several qualified vendors and compare them on total cost, not just price: quality, delivery reliability, payment terms, after-sales service and compliance. Verify GST registration, bank details and references before onboarding. Rate vendors every year and share feedback, so that good suppliers want to keep your business.
Put contracts and controls in place
- Written rate contracts with clear specifications, price validity, delivery terms and penalties.
- A delegation of authority that sets who can approve purchases at each value level.
- Separation of duties: the person who raises a requirement should not be the one who selects the vendor and approves payment.
- Three-way matching of purchase order, goods receipt and invoice before payment.
- A single vendor master for the group, with changes to bank details verified independently.
Contracts for large categories deserve legal review; ATTPL Legal supports businesses with contract drafting and vetting.
Keep the businesses on side
Central procurement fails when operating teams see it as a bottleneck. Agree service levels, such as turnaround time for standard purchase requests, publish an easy catalogue of approved items and rates, and involve business users in vendor selection. Share the savings achieved with each company so that the benefit is visible.
Use simple technology
A procurement module in an ERP, or even a well-designed purchase request workflow, gives visibility of spend, approvals and pending orders across the group. ATTPL IT builds ERP and workflow solutions for growing businesses. For freight-heavy categories, rate contracts with a reliable transporter such as ATTPL Fleet can bring both savings and predictable delivery.
Watch the risks of central buying
Pooling spend also concentrates risk. If one vendor supplies a critical item to every group company, a strike, quality problem or financial failure at that vendor affects the whole group. For important categories, approve at least two vendors and split the volume, even if a single vendor offers a slightly lower price. Rotate procurement staff across categories over time, declare conflicts of interest every year and let internal audit review central purchasing regularly.
Measure the results
Track a few clear indicators every quarter: savings against previous prices, share of spend under rate contracts, number of active vendors per category, purchase-order cycle time and on-time delivery. Report them to group management alongside the audit observations on procurement, so that cost and control improve together. Our article on shared services for group companies explains how procurement fits into a wider shared-services model.
How ATTPL HOLDCO can help
ATTPL HOLDCO coordinates shared functions across ATTPL group companies. Learn more about our services and about the group, or contact us to discuss how a shared approach could work for your business.
Frequently asked questions
What is group procurement?
It is a model in which group companies pool their purchasing for common categories so that the group can negotiate better prices, terms and controls.
Does centralised procurement slow down purchases?
It can if poorly designed. Rate contracts, clear service levels and an approved-item catalogue keep routine purchases fast.
Which categories should be centralised first?
Start with large, common categories such as IT equipment, insurance, travel, fuel and logistics, where pooled volume gives the clearest savings.
