The Procurement Glossary » Demand Management
Demand Management
Sourcing & RFx
Definition
Influencing what and how much the business buys — challenging need, standardising specs and curbing over-consumption — to reduce spend at the source.
Explanation
The cheapest unit is the one you don't buy. Demand management works before sourcing: consolidating requirements, questioning specifications, and setting policies (e.g. standard laptop models) so genuine need drives spend rather than habit.
Example
Demand management caps monogrammed stationery and standardises laptops to two models, cutting IT spend 15%.
Related terms
- Value Analysis — A systematic review of a product or service to improve its value — cutting cost without losing function, or adding function without adding cost.
- Specification — A precise description of what is required — the features, quality, quantity, standards and performance a supplier must meet.
- Spend Analysis — The process of collecting, cleaning, classifying and analysing purchasing data to understand what an organisation buys, from whom and for how much.
- Tail Spend — The large number of low-value transactions and suppliers that together make up a small share of total spend but a big share of effort.
Frequently Asked Questions
What is Demand Management?
Influencing what and how much the business buys — challenging need, standardising specs and curbing over-consumption — to reduce spend at the source. The cheapest unit is the one you don't buy. Demand management works before sourcing: consolidating requirements, questioning specifications, and setting policies (e.g. standard laptop models) so genuine need drives spend rather than habit.
Can you give an example of Demand Management?
Demand management caps monogrammed stationery and standardises laptops to two models, cutting IT spend 15%.
Back to the procurement glossary | Procurement concepts | Contact us