Direct sourcing refers to the purchase of raw materials, goods and services that are used in a business’s core operations. Goods and services that are obtained through direct sourcing become part of the final product that is offered to end users.
A car manufacturer, for example, needs specific kinds of steel and plastic that are eventually fitted into its vehicles. The procurement of these materials can be called direct sourcing. Because these materials are vital for production, direct sourcing is generally managed in-house by a central procurement team.
Direct sourcing stands in contrast to indirect procurement, which refers to the purchase of goods, services, supplies and materials that are needed for the running of a business but don’t end up in the business’s final product.
Learn more about GEP’s direct sourcing software.
GEP SMART is an AI-powered, cloud-native source-to-pay platform for direct and indirect procurement. GEP SMART offers comprehensive source-to-pay functionality in one user-friendly platform, inclusive of spend analysis, sourcing, contract management, supplier management, procure-to-pay, savings project management and savings tracking, invoicing and other related functionalities.
GEP NEXXE is a uniﬁed and comprehensive supply chain platform that provides end-to-end planning, visibility, execution and collaboration capabilities for today’s complex, global supply chains. Built on a foundation of data, artiﬁcial intelligence and cognitive technologies, GEP NEXXE helps enterprises digitally transform their supply chains and turn them into a competitive advantage.