Author name: Ganeswar Swain

A Direct Materials Budget is a financial plan that outlines the expected costs and quantities of raw materials required for production within a specific period. It is an essential component of the overall budget in manufacturing or production-oriented organizations, helping businesses plan for the procurement and use of raw materials in the most cost-effective manner. […]

Direct materials are raw materials or components that are directly used in the production of goods or services. They are essential for the manufacturing process and can be directly traced to the final product. Examples of direct materials include steel in car manufacturing, fabric in clothing production, or flour in the production of baked goods.

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

An Enterprise Resource Planning (ERP) system is an integrated software solution that centralizes and automates key business processes across departments, including procurement, finance, and supply chain management. By providing a unified platform, ERP systems enable real-time data access, improve decision-making, and streamline operations. In procurement, ERPs facilitate supplier management, inventory tracking, purchase orders, and invoicing.

Ethical procurement refers to the practice of sourcing goods and services in a responsible and transparent manner, ensuring that social, environmental, and legal standards are met. This approach emphasizes fair labor practices, sustainability, and the ethical treatment of suppliers and workers. Ethical procurement encourages organizations to prioritize suppliers who uphold high standards of integrity, respect

A Direct Cost System is a method of accounting that assigns costs directly associated with the production of goods or services. These costs typically include raw materials, labor, and manufacturing expenses, which are directly traceable to specific products or services. In procurement and supply chain management, the direct cost system helps organizations track and allocate

Order Management is the process of efficiently handling and tracking customer orders from initiation to fulfillment. It involves managing the order lifecycle, including order entry, inventory management, processing, shipping, and delivery. In procurement and supply chain management, effective order management ensures that orders are fulfilled on time, with accurate inventory levels and optimal resource allocation.

A Source Contract is an agreement established between a buyer and supplier during the sourcing process. It defines the terms and conditions under which goods or services are procured, including pricing, delivery schedules, quality standards, and payment terms. In procurement and supply chain management, source contracts help streamline purchasing processes by providing clarity and setting

Advanced Services Procurement refers to the strategic sourcing and management of complex, value-added services rather than simple goods or standard services. It involves identifying, selecting, and negotiating with suppliers who can provide specialized expertise, such as consulting, IT services, or outsourced operations. In procurement and supply chain management, this approach focuses on optimizing service delivery,

An Agile Supply Chain refers to a flexible, responsive, and adaptable approach to managing supply chain operations. It focuses on quickly adjusting to changes in demand, market conditions, and supply disruptions. This model emphasizes real-time collaboration, efficient resource allocation, and the ability to rapidly pivot strategies. In procurement and supply chain management, an agile supply