Indirect vs. Direct Procurement: Is one more important than the other?

Procurement is a complex business function, nuanced from organization to organization, and unconsciously tied to many facets of a company’s corporate structure.

Revenue, cost, and production are direct results from procurement actions.

Without the sourcing and purchasing of goods, materials and/or services, there wouldn’t be a business. These are the actions — undervalued as they may be — that insert the key in the ignition and start the engine of a well-oiled business, internally and externally.

As all business functions, procurement possesses segmentations that must work together, while remaining completely stand-alone: such as Indirect Procurement and Direct Procurement.

These two subsidiaries of the overall procurement function have been split apart in definition and assignment, and for obvious reason. Indirect and Direct Procurement function with complete autonomy from each other, and have little to do with each other, besides the root of the functions: sourcing and purchasing.

But, could there exist one without the other? Could a business value Direct Procurement without even practicing Indirect?

Hopefully, this post can offer a means to start answering these very pertinent questions.

I know. The suspense is killing me too. So… let’s begin!

What are the differences between Indirect and Direct Procurement?

READ THE FULL ARTICLE HERE