What are indirect categories?

Indirect Categories, in the context of procurement and supply chain management, refer to goods and services that are essential for an organization's internal operations but are not directly incorporated into the production of its final products or services. These categories encompass a wide range of items, including office supplies, IT equipment, maintenance services, and utilities.

Managing Indirect Categories is crucial for maintaining the day-to-day functions of a business. While they may not contribute directly to the core product or service, inefficiencies or disruptions in Indirect Categories can impact overall operations and productivity. Procurement professionals focus on cost control, supplier relationships, and optimization strategies within these categories to ensure efficient and cost-effective operations.

Indirect Categories are distinct from Direct Categories, which include goods and materials directly used in the production or manufacturing process.