Direct Materials

Direct procurement encompasses items that are part of finished products, such as raw material, components and parts. Direct materials sourcing is the focus in supply chain management and it directly affects the production process of manufacturing firms. It is a highly complex category and direct material sourcing spends are "high stakes" because they critically affect supply chains, customer sales, and ultimately, the bottom and top lines. 

Category Management With SMART by GEP

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Having delivered multiple projects in more than 20 industries across multiple geographies, including Americas, Europe and Asia-Pacific, we have a deep understanding of sourcing a wide range of direct material categories. We have been extensively involved in contract and vendor management, cash flow improvement, sourcing, budgeting, reporting and other related activities, thus providing a reliable and effective procurement process. 

Direct material supplier power should not be underestimated; manufacturing companies feel the pressure of competition from emerging markets and adopt measures such as collaboration that will lead to increased information sharing, pursuing higher procurement risk management, etc. We know that for our clients it is important to build strong supplier relationship, minimize the supplier risk by having contingency plans in place.

Apart from strategies such as negotiating fixed prices along with periodical adjustments, establishing hedging initiatives and implementing advanced buy/sell processes, technology is also critical to minimize the risks of fluctuations in the raw material prices. With our advanced technology, we can help your company manage this crucial spend in the most effective way.

Creating a Winning Strategy

Procurement and sourcing excellence is what we deliver. From consulting to services to technology, GEP delivers the spectrum of procurement solutions to help CPOs maximize their impact on business operations, strategy and financial performance.

At GEP, we believe in aiming for procurement excellence. So, it's not about being better, it's about being best in class. We'll help you develop an organization-wide procurement strategy ― aligned to your business goals ― that's engineered for success.

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Whether or not your procurement team has experience in Low-Cost Country Sourcing (LCCS), GEP can help you achieve greater value from your spend more rapidly. On average, GEP delivers incremental savings of 25 to 30 percent when sourcing from low-cost country sources, instead of domestic or local suppliers.

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