About Company

The Sourcing Wizards is an initiative by procurement professionals coming under a single umbrella, offering their years of learning to the new generation organisations as well operational excellence advisory to all clients
Our team brings years of their expertise of spend management while working for best-in-class organizations in leadership positions.
Now we are available to you to ensure your procurement and sourcing capabilities are optimized and that you are getting the most value for each dollar being spent at the best possible price from your suppliers.
We serve as an expansion of your existing teams, saving you time and resources by applying our experience, tools, cross-industry best practices, and personalized solutions

What is indirect spend?

Indirect spend refers to an organization’s expenditure on goods and services which are not directly incorporated into the product or service delivered. Indirect spend can be thought of as all the supporting or overhead expenditure, whether corporate or factory/facility related.

 

Indirect spend is often neglected within a procurement organization and at times performed by a variety of different departments. There are few well-defined processes and fewer outcome-based metrics for indirect procurement.

 

However in our experience, procurement for indirect spend and non-tradable goods or services typically has a high potential for savings. When focusing on reducing costs in your company, indirect purchasing is often ignored. Optimization makes a noticeable difference and often improves profits within a very short timeframe.

 

For most organizations, most spend will be on direct or core materials. However, indirect spend can form a surprisingly significant value but with spend spread over a wide scope of spend categories and suppliers, and with much indirect spend managed by non-commercial functions in an organization, indirect spend is often over-looked. In retail, for example, indirect spend (or GNFR – goods not for resale) can account for one seventh of turnover, similarly in QSR industry it could reach upto 1/10 of the turnover.

What is so specific about Indirect spends?

Not Considered Strategic

Generally oversee the value of managing their indirect spend, this could be because of the simple reason of not having visibility into the volume

Generally Driven by Stakeholders

This spend generally without the mandate and power to control the spend that comes by default in case of direct expenditures

Consists of “Maverick” spend

These could be one time purchases of office supplies or maintenance etc.. and aren’t visible to procurement teams/management as such.

Need for Diverse Experience

Purchases can include items from simple office supplies to catering to technology driven IT hardware/Software/Facilities/Marketing etc.

Difficult to Evaluate

Criteria and metrics typically applied to direct suppliers simply aren’t always available for indirect suppliers.

Excessively large Supplier Base/Smaller Average Spends

Purchase volume is often not large enough simply because it is spread over wide variety of Product categories and suppliers

Ground realities which endorse the above specifics

Locating supplier contract is a challenge,let alone monitor and manage contract performance

Domain expertise is limited to most strategic or high-dollar spend categories

Procurement strategies are often not aligned with financial and business intiatives

Clear visibility into total enterprise spending is not available

Strategic sourcing process applied to less than half of their overall spending

Detailed management reporting and monitoring is difficult or nen-existent

Nearly 33% of purchases off-contract(i.e.) maverick buys

Procurement continues to lag other functions in the utilization of automation and analysis tools

How Do We Address All Such Challenges

We have an extremely methodical approach to address the above challenges and come out with a meaningful

Please share your details and we will come back to you with a personalised approach and solution

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