| |
Direct procurement is a formal process for acquiring goods and services to be used directly in your products and services.Indirect procurement is a formal process for acquiring goods and services to be used internally.
Direct Procurement vs Indirect ProcurementDirect procurement is typically a strategic function of a business that has implications for profit margins, operational efficiency, product design and customer experience. As such, direct procurement processes may be highly optimized with investments in technology and organizational structures.Indirect procurement is more of an administrative process that is geared to financial controls. It isn't typically viewed as a competitive advantage. The products and services considered within the scope of direct procurement vary by industry.
Example: Capital Equipment A cloud infrastructure provider will view computing equipment for its data centers as direct procurement. A fashion company that uses computers to design products will view computing equipment as indirect procurement.Example: ExpensesAn IT consulting firm will use indirect procurement processes to buy tissue paper provided as an office supply. A hotel will use direct procurement processes to purchase tissue paper for rooms.|
| Direct Procurement | Indirect Procurement | Definition | Procurement of goods and services that are directly used in your products. | Procurement of goods and services that are used internally. | Viewed As | | Financial Control |
Procurement
This is the complete list of articles we have written about procurement.
If you enjoyed this page, please consider bookmarking Simplicable.
A few basic examples of compliance.
An overview of fiduciary duty.
A few examples of conflict of interest.
A definition of independent knowledge with an example.
A definition of segregation of duties with examples.
A definition of internal controls with examples.
The difference between conformance and compliance.
A definition of administrative burden with examples.
The definition of fair competition with examples.
The definition of insider information with examples.
A guide to management techniques.
A list of techniques for developing and implementing a strategy.
The basics of productivity.
A guide to project management.
The common types of internal benchmarking.
A definition of internal customer with examples.
A definition of business optimization with examples.
The common types of team objective.
A definition of internal stakeholder with examples.
An overview of the different types of management planning.
A definition of management with examples.
TrendingThe most popular articles on Simplicable in the past day.
Recent posts or updates on Simplicable.
Site Map
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
|