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Direct Materials Sourcing

Direct Procurement

Create value at every stage of the product lifecycle

See Ivalua’s Direct Procurement in Action

What is Direct Procurement?

At its most basic level, Direct Procurement, which is also known as Direct Spend Management, refers to the end-to-end process companies use to manage the procurement of direct materials – that is the materials, goods, and services that make up a product.

In practice, Direct Procurement is made up of a series of related processes that span the full lifecycle of a product and include internal and external stakeholders, such as those from Procurement, Engineering, Logistics, Accounts Payable, the Supply Chain Management team, as well as the suppliers that make up the supply chain.

For manufacturers, the Direct Procurement process typically begins with the New Product Introduction (NPI) process which includes product design, sourcing, quality, product launch and continues through production all the way to the products end-of-life.

Common Challenges Faced by Procurement when managing Direct Spend:

Manual & disconnected processes

Inefficient product launches

Siloed data & poor collaboration with suppliers & stakeholders

Lack visibility into supply disruptions, performance, compliance, quality & risks

Increased safety stock & occurrence of stock-outs, missed & delayed shipments

Why is Direct Procurement Important?

Direct Procurement processes are critical to product success, and by extension the success of the organization. Direct Procurement, when successful, builds supply chain resilience.

To achieve resilience, procurement must ensure that product components are available at the right time, quantity, location, quality, price, and that the supplying companies abide by company policy, performs well, and is not risky. The nature of Direct Procurement is often complex, both in terms of the end-to-end process, technical nature of components, regional regulations & compliance, and global supply chain.

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We operate in a highly competitive and dynamic market. Our desire is to involve Procurement further upstream in the purchasing process and the product lifecycle with the aim of managing risk, reducing time-to-market and improving the company’s performance. Ivalua has proved to be the most suitable tool for our business due to its functionality, its ergonomics and its interfacing capabilities with our ERP Quote - Right - White

Sagemcom logo

Jean-Claude BARBERAN

Purchasing Director


Domestic Production Activities Deduction


Direct Procurement Benefits to the Organization

Improved Supplier Management, collaboration & innovation

Achieve target costs and increase speed to market

Category Management to strategically manage core spend categories

Monitor product quality, risk, compliance, and performance

Reduce supply disruptions and order cycle times

How can Direct Procurement Solutions Help?

Screenshot – Risk Center

Supplier Management

  • Manage all Supplier Information Management
  • Monitor Supplier Risk & Take Action
  • Leverage a single Supplier Portal for all activities

Spend Analytics for Direct Materials

  • Gain insights actionable intelligence
  • Find opportunities to leverage & consolidate spend
  • Better enable supplier allocations by region & rationalize suppliers
Screenshot – Spend Analysis
Screenshot - Bom Lifecycle Manager

Direct Material Sourcing

  • Make your BOM your sourcing dashboard
  • Strategically manage categories and complex BOM & Cost Breakdown Sourcing
  • Enable optimal supplier allocation based on cost & non-cost factors

Product Quality

  • Collaboratively identify & mitigate issues
  • Standardize & improve product launch & audit readiness standards
  • Project, supplier, and organizational strategy
Screenshot - Sourcing - Advanced Product Quality Planning (APQP)
Screenshot - PO Collaboration Scheduled Lines

Supply Chain Collaboration

  • Benefit from digital collaboration, and transparent supply-chain transactions
  • Reduce errors, cycle-time and improve accuracy and agility
  • Share & collaborate on demand forecasts & preempt potential disruptions

Master Data Management

  • Obtain transparency, visibility, better opportunity identification with one Vendor, and Item & Source source of truth
  • Capture, cleanse and maintain clean and accurate master data
  • Reduce transaction errors and duplicate efforts across the organization
Screenshot – Supplier - Browse Payment Request - sct
Digital Integration

Integrations for Direct Materials

  • Quick, proven, and stress-free management of integrations
  • Ability to meet unique and highly complex requirements (e.g., Multi-ERP, MRP, PLM, etc.)
  • Leverage existing adapters for rapid time to value

How Ivalua Can Help

Ivalua has proven expertise with direct materials and powerful solutions to help build supply chain resilience. Our customers design and manufacture incredible products. We help them work more effectively across internal teams and with suppliers to accelerate product speed to market, drive innovation, reduce risk, improve performance and decisions, and ensure reliable supply of components and materials.


Related Resources

Customer Video

Meritor – Driving Growth Through Supplier Collaboration

The Partner Perspective – Why Ivalua for Direct Materials?

Partner Perspective - Testimonial 1:29


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