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Indirect procurement or direct procurement, what’s the difference?

A lot of great enterprises have outsourced the procurement. Outsourcing the procurement saves a lot of time and money. Great enterprises can save up to 21% on indirect purchasing costs. There are different procurement processes you can outsource. You have the options indirect procurement and direct procurement, but what’s the difference? We will explain you in this article.

Direct procurement

Direct procurement is the acquisition of for example raw materials. Like materials for the production process of your product. For example, a manufacturer of cars can’t produce cars without specialized micro-chips. Most of the time these materials will be purchased in large quantities. These common purchases are important to keep the business going. When this purchasing process ceases to function, companies are no longer able to produce their products and generate revenue.

Indirect procurement

Compared with direct procurements, indirect procurements don’t harm your core-business. Indirect procurement is all about the purchase of supportive goods like equipment and office supplies. Better known as Non Product Related (NPR) goods. Without these goods, you’re still able to continue with your core-business, produce certain products. So, it’s not the priority of the purchaser. But it will harm other departments, like maintenance departments and HR.

The benefits of outsourcing indirect procurement

Because the indirect procurement has not the priority of the purchaser, it often happens declared invoices are not provided with the right invoice numbers and are most of the time too expensive. By outsourcing the indirect procurement, you can save up to 21% on indirect procurement. Replace all those small suppliers for just one total supplier. You’ll have one invoice, one payment terms and one party to contact.

Outsource the indirect procurement to Corlido Group

The Corlido group is an international purchasing organization and are experts in invoice management. The more than 100 purchasing and supply chain professionals of Corlido group are experienced in reducing the supplier base and save costs. From 23 worldwide locations they serve their worldwide clients.

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