Direct Categories

back_arrow

Back to Glossry

D
Direct Categories

Direct categories in procurement refer to the goods and services that are directly used in the production of a company’s final product or service. These are also called direct spend categories, and they include all purchases that directly impact manufacturing, operations, or service delivery.

Examples of direct categories include:

  • Raw materials (e.g., steel, chemicals, fabric)
  • Components and parts (e.g., circuit boards, engines)
  • Packaging materials
  • OEM (original equipment manufacturer) supplies

Managing direct categories is critical because they directly affect product quality, production timelines, and costs. Procurement teams often work closely with engineering, operations, and supply chain departments to ensure continuity of supply, quality standards, and cost efficiency.

This is distinct from indirect categories, which cover items like office supplies, marketing, or IT services that support operations but don't go into the final product.