Direct Vs Indirect Procurement | Explained | Urdu & Hindi | Procurement Academy

Hi Everyone!
Today, we will talk about "Direct Vs Indirect Procurement"
What's Direct & Indirect Procurement:
Direct Procurement and Indirect Procurement are two distinct categories within the procurement process, each involving different types of goods and services.
Let's define and explore these concepts along with some examples:
Direct Procurement:
Direct procurement refers to the sourcing and acquisition of goods and services that are directly used in the production of a company's final product or service. These items are typically essential for the core operations of the business. Direct procurement is often associated with manufacturing or production companies.
Examples of direct procurement:
a) Raw materials: For a furniture manufacturer, the procurement of wood, fabrics, screws, and other materials used in the production of furniture would fall under direct procurement.
b) Components and parts: An automobile manufacturer procuring engines, tires, batteries, and other components necessary for assembling vehicles.
c) Machinery and equipment: Procurement of specialized machinery or equipment required for production processes, such as a printing press for a printing company.
Indirect Procurement:
Indirect procurement involves the sourcing and acquisition of goods and services that are not directly incorporated into the final product but are necessary for supporting the company's operations. These items are often considered overhead or indirect expenses.
Examples of indirect procurement:
a) Office supplies: Procurement of stationery, printer cartridges, computer equipment, and furniture for administrative purposes.
b) IT services: Outsourcing IT support, software licenses, hardware maintenance, and network infrastructure.
c) Marketing services: Procurement of advertising agencies, graphic design services, printing services, and promotional materials.
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