Procurement Types.
- Direct procurement.
- Indirect procurement.
Based on the consumption purposes of the acquired goods and services, procurement activities are often split into two distinct categories.
- The first category being direct, production-related procurement.
- The second being indirect, non-production-related procurement.
Procurement Types- Direct Procurement.
Direct procurement occurs in manufacturing settings only.
- It encompasses all items that are part of finished products, such as raw material, components and parts.
- Direct procurement, which is the focus in supply chain management, directly affects the production process of manufacturing firms.
Procurement Types-Indirect procurement.
In contrast, indirect procurement activities concern "operating resources" that a company purchases to enable its operations.
It comprises a wide variety of goods and services, from standardized low value items like office supplies and machine lubricants to complex and costly products and services like heavy equipment and consulting services.
