Indirect, Direct, and Strategic Sourcing
Approaches to sourcing that focus on optimizing costs, forming partnerships, and leveraging group purchasing organizations (GPOs).
Implications
The various approaches to procurement, where indirect sourcing involves purchasing goods and services that are not directly tied to the production process (e.g., office supplies), direct sourcing focuses on acquiring raw materials or components for manufacturing, and strategic sourcing involves optimizing the overall procurement process to align with long-term business goals.
Example
Example: A manufacturing company practices direct sourcing by securing raw materials from reliable suppliers, while also engaging in strategic sourcing to develop long-term partnerships that enhance supply chain resilience.
Related Terms
Different from tactical sourcing, which deals with short-term purchasing decisions, strategic sourcing is focused on long-term alignment with business objectives, while direct and indirect sourcing distinguish between production-related and non-production-related purchases.
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