How Internal Demand Is Captured and Documented
Internal demand is the organization’s need for goods or services to keep operations running, deliver projects, or comply with maintenance and safety requirements. In purchasing management, that demand becomes actionable only when it is captured in a consistent format and documented with enough detail for others (approvers, procurement, suppliers, receiving, accounts payable) to act without guessing.
Typical sources of demand
- Inventory signals: reorder points, min/max levels, cycle counts, or stockout alerts from an ERP/WMS.
- Operational requests: end users reporting a need (e.g., a team needs laptops for new hires).
- Project plans: bill of materials, work packages, or milestone-based procurement needs.
- Maintenance plans: planned preventive maintenance schedules, inspections, or regulatory compliance tasks.
- Asset lifecycle events: equipment failure, end-of-life replacement, or upgrades.
Demand capture is not only “someone asks for something.” It is a controlled intake process that ensures the request is legitimate, budgeted (or escalated if not), and described precisely enough to be sourced and purchased.
What Triggers a Purchase Requisition (PR)
A purchase requisition is the internal document (often electronic) used to request approval and initiate purchasing action. A PR is typically triggered when the need cannot be fulfilled immediately through an existing internal channel (e.g., stock on hand) and requires a purchasing commitment.
Common triggers and what they look like
- Stockout or low stock: A warehouse bin hits reorder point; production risks stoppage. Example: “MRO gloves size L below min level; reorder to restore safety stock.”
- New project: A project starts and needs materials/services not yet contracted. Example: “Kickoff of office renovation requires contractor services and materials.”
- Replacement: An asset fails or is obsolete. Example: “Forklift battery failed; replacement required to resume operations.”
- Planned maintenance: Preventive maintenance schedule requires parts or service. Example: “Quarterly HVAC service and filter replacement per maintenance plan.”
In practice, the trigger should be stated explicitly in the requisition justification so approvers can quickly understand urgency and business impact.
Specifying Requirements: What “Good” Looks Like
A well-prepared requisition reduces back-and-forth, prevents wrong purchases, and speeds approval and sourcing. The goal is to specify requirements clearly enough that procurement can obtain comparable quotes or place an order without re-interpreting the need.
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Core requirement elements
- Quantity and unit of measure: Specify the count and UoM that matches how it is purchased and received (e.g., “12 each,” “4 boxes of 100,” “1 annual subscription”).
- Specifications: Define the technical and functional requirements. Use measurable attributes when possible (size, material, performance, compatibility, standards). Avoid brand-only descriptions unless justified by compatibility or standardization.
- Delivery date (need-by date): The date the item/service must be available for use, not the date you submit the PR. Include constraints (e.g., “must arrive before shutdown window”).
- Delivery location: Site, building, dock, floor, room, and receiving contact. For services, include where the work will be performed.
- Budget code / cost center / project code: The accounting string that determines where the cost is charged. If split-funded, specify allocation percentages.
- Justification: Why it is needed, what happens if delayed, and how it supports operations/project/compliance. This is often the difference between a fast approval and a stalled request.
Helpful additions that prevent delays
- Suggested supplier (optional): Provide if there is a known qualified source, but avoid making it a “single-source” unless justified.
- Estimated cost: Based on last purchase, catalog price, or informal budgetary quote; helps approvers and procurement plan.
- Attachments: Quotes, scope of work, drawings, part numbers, photos, safety data sheets, or email approvals where policy allows.
Step-by-Step Purchase Requisition Template (Annotated)
Use the template below as a practical checklist. The exact fields vary by system, but the logic is consistent: identify the requester, describe the need precisely, define timing and location, provide financial coding, and attach supporting documents.
| PR Field | What to enter | Example entry | Why it matters downstream |
|---|---|---|---|
| Requisition Title / Short Description | A clear, searchable summary | “Replace failed UPS for Server Room A” | Helps approvers and procurement triage and find similar past buys |
| Requester (Name, Department) | Who needs it and who can clarify | “A. Patel, IT Operations” | Procurement needs a contact for questions; receiving needs a point person |
| Request Date | Date submitted | “2026-01-18” | Supports tracking and SLA measurement |
| Need-by Date | Date required for use | “2026-02-05 (before planned network maintenance)” | Drives sourcing urgency, shipping method, and scheduling |
| Trigger / Reason | Select or state trigger category | “Replacement: UPS battery failure alarm; risk of outage” | Approvers assess urgency and business impact |
| Item/Service Type | Goods, service, subscription, rental, etc. | “Goods + installation service” | Determines tax treatment, receiving steps, and service acceptance |
| Line Item Description | What is being purchased, per line | Line 1: “UPS 3000VA, rack-mount, 230V, network card included” | Enables accurate quoting, ordering, and matching at receipt/invoice |
| Specifications | Measurable requirements, compatibility, standards | “Must fit 19-inch rack; runtime ≥ 10 min at 50% load; SNMP monitoring; compatible with existing PDU model X” | Prevents wrong item selection and returns; supports comparable bids |
| Quantity | Number of units | “1” | Impacts pricing, shipping, and inventory/asset records |
| Unit of Measure | Each, box, hour, month, etc. | “Each” | Avoids receiving and invoice mismatches (e.g., box vs each) |
| Estimated Unit Price | Budgetary price | “$1,250 (based on last purchase)” | Supports approval thresholds and sourcing strategy |
| Estimated Total | Auto-calculated or entered | “$1,250” | Determines approval routing and budget checks |
| Delivery Location | Ship-to site and details | “HQ, Building B, Dock 2; Attn: Receiving (J. Gomez); deliver 8am–3pm” | Reduces misdeliveries, storage issues, and re-shipping costs |
| Service Location (if applicable) | Where work occurs | “Server Room A, Building B, Floor 3; escort required” | Enables scheduling, access planning, and safety compliance |
| Cost Center | Operational cost owner | “CC-4102 IT Ops” | Ensures correct financial reporting and budget ownership |
| Project / WBS Code (if applicable) | Project funding reference | “PRJ-2026-017 Network Resilience” | Allows project cost tracking and capitalization rules where relevant |
| GL Account / Spend Category | Accounting classification | “GL 5630 IT Equipment” | Impacts approvals, reporting, and tax/accounting treatment |
| Budget Confirmation | Indicate budget availability or request exception | “Budget available in Q1; approved in department plan” | Prevents late-stage rejection and rework |
| Justification / Business Case | Why needed and impact if delayed | “Current UPS alarms indicate imminent failure; outage risks data loss and downtime; replacement required before maintenance window” | Speeds approvals and supports auditability |
| Suggested Supplier (optional) | Preferred vendor if justified | “Supplier A (existing support relationship); alternatives acceptable” | Can speed sourcing but should not restrict competition without reason |
| Attachments | Quotes, SOW, drawings, photos, part numbers | “Attach: photo of model label; last invoice; budgetary quote PDF” | Reduces clarification cycles and supports compliance |
| Approver(s) | System-routed or selected | “IT Manager; Finance per threshold” | Ensures correct authorization and prevents policy violations |
How to build the PR in a practical sequence
- Step 1: Confirm the need and trigger. Validate it cannot be fulfilled from stock or an existing internal channel.
- Step 2: Define the requirement. Write the description and specifications as if the reader has no context.
- Step 3: Set timing and location. Need-by date and ship-to/service location with constraints.
- Step 4: Add financial coding. Cost center/project/GL and estimated cost.
- Step 5: Attach evidence. Quote/SOW/drawings/photos or any compliance documents.
- Step 6: Write justification. One to three sentences: what, why, impact, and urgency.
- Step 7: Review for completeness. Check UoM, quantities, specs, and attachments before submission.
Common Pitfalls and How They Create Downstream Delays
Most requisition delays are not caused by procurement speed; they are caused by missing or ambiguous inputs that force rework. Below are frequent pitfalls and the specific downstream problems they create.
| Pitfall | What it looks like in a PR | Downstream delay it causes | How to prevent it |
|---|---|---|---|
| Unclear specifications | “Need a pump ASAP” | Procurement must ask questions; suppliers quote non-comparable items; wrong item risk increases | Include capacity, material, voltage, connection size, compatibility, standards |
| Brand-only request without justification | “Buy Brand X model Y” with no reason | Approvers/procurement may require alternatives or justification; sourcing pauses | State functional requirements; add justification if compatibility/standardization requires a specific model |
| Wrong cost center or missing project code | Cost center guessed or left blank | Budget check fails; finance rejects; PR rerouted for correction | Confirm with budget owner; use correct coding and split allocations if needed |
| Missing attachments | No SOW for services; no drawing for custom part | Procurement cannot solicit accurate quotes; suppliers ask for clarifications; cycle time increases | Attach SOW, drawings, photos, part numbers, scope details |
| Need-by date unrealistic or missing | “ASAP” or blank | Procurement cannot prioritize; expedited shipping may be required late; service scheduling conflicts | Provide a specific date and explain constraints (shutdown window, go-live) |
| Incorrect unit of measure | “1” but supplier sells in “box of 10” | Order quantity errors; receiving/invoice mismatch; partial deliveries | Use purchasing UoM; note pack size (e.g., “2 boxes of 10”) |
| Scope gaps for services | “Need electrician for wiring” with no details | Quotes vary widely; change orders later; approvals delayed due to uncertainty | Define deliverables, hours/coverage, site conditions, acceptance criteria |
| No justification or weak business case | “Need this for work” | Approvers request more info; PR sits in workflow | State impact, risk, and why now |
| Multiple unrelated items in one line | “Office supplies” as a single line | Hard to compare pricing; receiving cannot verify; invoice matching issues | Use separate line items with clear descriptions and quantities |
Practice Scenarios: Do You Need a Requisition or Another Method?
For each scenario, decide the best path: create a purchase requisition, use an existing contract, order from a catalog/punchout, or use a corporate card (if policy allows). Focus on the principle: choose the method that satisfies control, speed, and compliance with the least rework.
Scenario 1: Stock replenishment
Situation: The warehouse reports safety stock for “Nitrile gloves, size L” is below minimum. The item is a standard stocked SKU and is available in the internal catalog with negotiated pricing.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Catalog item (replenishment order through the catalog process)
- Reasoning: Standard item with predefined specs and pricing; catalog ordering reduces manual specification and approval effort.
Scenario 2: New project, specialized service
Situation: A new project requires a one-time structural assessment by a licensed engineer. No existing supplier is contracted for this service.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Purchase requisition
- Reasoning: Service scope must be defined (SOW), approvals are needed, and procurement may need to source qualified providers.
Scenario 3: Replacement part with known part number
Situation: A production line sensor failed. Maintenance has the exact manufacturer part number and a photo of the label. The supplier is not predetermined.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Purchase requisition (with part number and photo attached)
- Reasoning: Even with a clear part number, procurement may need to source availability and best price; approvals and correct cost center coding are required.
Scenario 4: Training subscription renewal
Situation: A department wants to renew an annual software subscription. There is an existing contract with the vendor that includes renewal terms and pricing.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Existing contract method (follow the renewal process tied to the contract)
- Reasoning: Terms are already negotiated; the key is to reference the contract and ensure budget/approval per policy.
Scenario 5: Low-value, urgent purchase
Situation: A team needs a $45 HDMI adapter today for a client meeting. The item is not in the catalog, and waiting for standard processing would miss the meeting. Corporate card policy allows low-value office peripherals with receipt submission.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Corporate card (if within policy)
- Reasoning: Low value and urgent; policy-permitted card use is faster than a PR. Document the business purpose and keep the receipt.
Scenario 6: Multiple items for a new hire setup
Situation: HR requests laptop, docking station, and standard headset for a new hire starting in two weeks. All items exist in the IT catalog with standard configurations.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Catalog item (standard bundle if available)
- Reasoning: Standard specs and pricing; reduces errors and ensures compatibility.
Scenario 7: Contractor requests materials “as needed”
Situation: A contractor asks you to “raise a PR for miscellaneous materials as needed up to $10,000” with no list.
- Decision options: PR, existing contract, catalog item, corporate card
- Best choice: Purchase requisition only after requirements are defined (or route through an existing contract with a defined mechanism, if one exists)
- Reasoning: Vague scope leads to approval and audit issues. Convert “miscellaneous” into line items or a clearly defined allowance with rules, documentation, and approval per policy.
