Do you know the characteristics that differentiate direct and indirect procurement?
Direct procurement is characterized by high volumes, regular purchases, and a small number of suppliers.
Indirect procurement, and MRO in particular, is characterized by low volumes, irregular purchases, a large number of different items, and a large number of suppliers.
These key differences mean that the cost of managing indirect procurement can be 4X the cost of direct procurement. As a result many companies fall into what I call the MRO complexity trap.
To avoid this trap companies need to consider a different model for managing their MRO procurement.
This is the basis of a recent webinar covering procurement outsourcing of indirect materials and specifically addressing the various pros and cons.
The key take-aways are:
- The key differences between indirect and direct procurement
- The unique management cost profile of each type
- The MRO procurement complexity trap
- The pros and cons of procurement outsourcing
- The results of a success story
The webinar is presented by Phillip Slater, Founder of SparePartsKnowHow.com and Turgay Temur, Global Business Development for the V-LINE Group.
To accompany the webinar we have created an associated white paper. This covers all the issues discussed and provides a handy reference.
Here is a link to download the associated white paper.
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You might also be interested in this white paper: Procurement Outsourcing for MRO and Indirect Materials