How do you handle an employee creating a requisition for an item that has not been purchased before? The item has not been created in NetSuite.

In one of the companies where I worked, the was a Central procurement dept that would create an item based on Jira ticket

The answer is more about internal process than about NetSuite. Some department is the owner of the item catalog, they update the item list as necessary. Or you use a "To Be Defined" dummy item and change the description in the Requisition. Some department still need to update the Requisition with the correct item, so sooner o later the job needs to be done.