Some examples may include labour if you are a construction company, food if you are a restaurant or product parts if you are a manufacturer. The purchasing and sourcing of any goods, materials or services required for the continued operation of your business, but not directly related to the creation of your company’s core offering. The purchasing and sourcing of any goods, materials or services directly related to the creation of your company’s core offering. While both terms share the word "procurement," indirect and direct procurement function separately. The only similarities between the two are the actions of sourcing and procurement. Considering both these areas will help businesses assess the available tools on the market, such as SAP. To ensure each leader is equipped with the right knowledge to develop their indirect procurement strategy, we have outlined the key differences between the different types of procurement and a few tips to guide your process. As a lesser-known process, it can be challenging to create an indirect procurement strategy that accelerates your business transformation if you aren't in the procurement department. While direct procurement is likely viewed as a priority, indirect procurement, when done correctly, can also help your business achieve cost savings and improve efficiency. However, those who don't work directly with procurement might not realize that procurement is a broad set of processes involving direct and indirect procurement. Kearney found that business leaders must rethink their traditional operating models favouring more in-depth procurement strategies to track spending. In a recent study, Realizing the Power of Procurement by A.T. For those looking at making major business transformations, procurement should be a key player in your strategy.
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