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Procurement

Direct Procurement

Direct Procurement happens in manufacturing set up when the purchasing activities are on items that are part of finished goods. For example, raw materials, components, secondary process, and etc. These purchasing costs are directly affecting the unit cost of the finished goods.

Usually, direct procurement involves large purchase quantity and high purchase frequency. You can form procurement strategy with your suppliers such as a push or pull strategy, or a hybrid.

In Leego’s system, push strategy can be managed by safety stock set up and pull strategy can be managed by Material Resource Planning (MRP) or a combination of both.

 

Indirect Procurement

Indirect Procurement activities are referring to operating resources that a company purchases to enable its operations. It comprises a wide variety of goods or services other than direct procurement such as office supplies, equipment, marketing materials, consulting services and etc.

In Leego’s system, you can manage both the direct procurement and indirect procurement using difference approval or flow.