At its most basic level, Direct Procurement, which is also known as Direct Spend Management, refers to the end-to-end process companies use to manage the procurement of direct materials – that is the materials, goods, and services that make up a product.
In practice, Direct Procurement is made up of a series of related processes that span the full lifecycle of a product and include internal and external stakeholders, such as those from Procurement, Engineering, Logistics, Accounts Payable, the Supply Chain Management team, as well as the suppliers that make up the supply chain.
For manufacturers, the Direct Procurement process typically begins with the New Product Introduction (NPI) process which includes product design, sourcing, quality, product launch and continues through production all the way to the products end-of-life.
Manual & disconnected processes
Inefficient product launches
Siloed data & poor collaboration with suppliers & stakeholders
Lack visibility into supply disruptions, performance, compliance, quality & risks
Increased safety stock & occurrence of stock-outs, missed & delayed shipments
Direct Procurement processes are critical to product success, and by extension the success of the organization. Direct Procurement, when successful, builds supply chain resilience.
To achieve resilience, procurement must ensure that product components are available at the right time, quantity, location, quality, price, and that the supplying companies abide by company policy, performs well, and is not risky. The nature of Direct Procurement is often complex, both in terms of the end-to-end process, technical nature of components, regional regulations & compliance, and global supply chain.
We operate in a highly competitive and dynamic market. Our desire is to involve Procurement further upstream in the purchasing process and the product lifecycle with the aim of managing risk, reducing time-to-market and improving the company’s performance. Ivalua has proved to be the most suitable tool for our business due to its functionality, its ergonomics and its interfacing capabilities with our ERP
Improved Supplier Management, collaboration & innovation
Achieve target costs and increase speed to market
Category Management to strategically manage core spend categories
Monitor product quality, risk, compliance, and performance
Reduce supply disruptions and order cycle times