Direct sourcing is a procurement strategy where organizations bypass intermediaries and purchase goods, materials, or services directly from manufacturers or suppliers. This approach allows companies to negotiate better pricing, improve control over quality, and reduce procurement costs by eliminating middlemen’s markup. Direct sourcing also enhances supply chain transparency and strengthens supplier relationships, leading to more consistent product quality and better delivery timelines. While it offers significant cost savings and greater efficiency, challenges include managing supplier relationships, ensuring logistics coordination, and mitigating risks, especially when dealing with international or complex supply chains.
Related Terms
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Consolidated Invoice
A Consolidated Invoice is a single invoice document that aggregates multiple individual transactions or services provided over a certain period,
Compliance Scorecard
A Compliance Scorecard is a structured tool used within procurement processes to evaluate and ensure that all sourcing activities adhere
Contract Addendum
A contract addendum is a formal document that modifies or adds terms to an existing contract without altering its original
Contract Authoring
Contract Authoring refers to the process of creating, drafting, and preparing contracts for agreement and execution. It involves outlining terms,
Contract Review
Contract Review is the structured analysis and evaluation of contract terms to ensure compliance, mitigate risks, and align with organizational
Bid Response
A Bid Response is a formal reply by a supplier or vendor to a Request for Proposal (RFP) issued by
