Sourcing Indirect Materials and Services
Sourcing Indirect Materials
Purchasing of goods or services not directly associated with the product manufactured.
Indirect materials procurement focuses on the procure-to-pay cycle of goods needed to run a business. This process includes:
- Finding suppliers and negotiating pricing and contracts
- Sending purchase orders and receiving invoices
- Monitoring spend
Examples:
- Office supplies
- Cleaning services
- Rent
- Utilities
- IT equipment
Direct Spend Sourcing Adds Industry Capabilities
Direct Spend Sourcing
Purchasing of goods or services directly associated with the product manufactured.
Direct materials procurement focuses on the design-to-build cycle of product to be sold.
This process includes:
- Creation of a part list (BOM - Bill of Materials)
- Managing part and product lifecycle through the supply chain
- Collaboration with suppliers on future needs, quality, and pricing
Examples:
- Raw Materials
- Direct Labor
- Manufacturing Supplies
