BLOG

Key Challenges Companies Face in Direct Procurement Management

Jun 21, 2019

Today, organizations are increasing their focus on financial processes and are designing strategies to reduce indirect spend. However, the value of such strategies and solutions are limited to industries where indirect spend is less than the direct spend, as direct procurement management involves a different set of requirements. 

Direct procurement management is an extensive process that entails multinational suppliers, lengthy lead times, and heavy reliance on logistics. Direct procurement management also requires extensive collaboration among different parties to manage the supply chain. It has a greater impact on organizations’ customer retention, as failures in supply chain management and product delivery affect customer experience and loyalty, as well as business success and growth. Therefore, in this blog, we have highlighted the key challenges that companies face in direct procurement management.

Developing a robust direct procurement process requires updated market data. Request a free demo to know how our experts can help you with precise market insights.

Request Free Demo

Challenges in Direct Procurement Management

Complex supply chains

The supplier base for direct procurement is usually much wider and complex when compared to that of indirect procurement. This puts valuable goods at stake and increases the possibility of process inefficiencies. Factors like supply chain movement, supplier base health, and brand value play a critical role in direct procurement management.

In addition, direct procurement process requires companies to engage with suppliers directly for placing orders and sharing forecasts. This involves multi-tiered supply chains making it even more difficult for companies. 

Improving visibility into all supply chain processes will help organizations track their shipments and keep the production going. Also, gaining supply chain financing will provide access to capital when required and maintain the efficiency of the supply chain and the supplier base.

Globalization

Globalization has been a critical factor in transforming the way how organizations have been managing their procurement. Global direct procurement management requires businesses to manage an expensive and diverse supply chain that operates across different borders. More touch points are needed to gain accurate data in real time for the efficient flow of goods. In addition, shipping orders across borders entails extensive documentation to clear customs, as well as requires detailed coordination between organizations, trading partners, and even local governments.

The complexities further escalate with the involvement of a range of business partners, the types of transactions, and the flow of financial assets. To gain detailed insights into the direct procurement and indirect procurement, request more information here!

Logistics management

In direct procurement, a long term financial planning is imperative for a successful supply chain. Although logistics do not have much role in indirect procurement processes but in direct procurement management, it directly impacts customer experience and business success. Proper management of the extensive amount of data among different parties is must to ensure that the suppliers are packing, producing, and shipping orders correctly to ensure the safe delivery of products in an efficient manner.

Visibility into inventory, purchase orders, shipments, and payments, will help in developing a robust supply chain. Also, improving transportation procurement will enable companies to prevent goods shortages and build a positive customer experience.

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars