Indirect expenditure behind direct costs can be beneficial through accurate performance management. Proper measurements are important here.
Consequently, direct spending has never been more popular or a center of attention than outright spending. Indirect expenditure has been ignored for a long time in major initiatives.
Efficiency and a consistent attitude of savings make indirect spending even more important. While this is a good thing, it is necessary to measure the performance accurately in order to ensure that deliveries to the recipients are as efficient as possible.
Spending on goods and services that are not included in the production system or are not a part of the production system may be considered indirect expenses. The product itself may be said to be the subject of indirect spending. Examples of indirect expenditure: maintenance of production lines are expenses such as facility management, marketing and consulting services.
Direct or indirect expenditures also have different value-creating factors. While large quantities of goods are transferred into production, small purchases are usually made to meet specific demands. The relative share of indirect expenditure may be limited, but its absolute share is important.
For example, BMW and Daimler each report that major car manufacturers spend more than €15 billion indirectly every year. This example should be seen as a sufficient reason for everyone to closely examine indirect expenditure and its structural properties, in particular in terms of performance.
Demonstrates consistently identifying key performance indicators (KPIs). It is no different to measure indirect expenditure performance. These objectives need to be driven by deriving from the company’s strategy.
Proactive opportunities also facilitate indirect expense management. Indirect expenditures will also help eliminate the negative impacts on the profitability of the business. For such cases, you can get support from purchasing professionals or use software specially built for this.
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Increasing revenues or technological developments on the supplier side and other contributions made by the figures on the last line of the balance sheet profit and loss statement are important. All this should provide a starting point.
Procurement managers should look at structural indicators as well as other indicators that indicate what has been expended under purchasing management and how well this has been managed commercially, how plain or harmful the functions performed. As purchasing is a work of people, employee satisfaction needs to be measured regularly.
Dolaylı harcamalar konusunda faaliyet gösteren ekibinse, üçüncü kişilerle çalışması da hayati bir önem taşımaktadır. Sayısallaştırmanın zor olduğu bu alaThe team that operates in the area of indirect spending also has a vital importance to work with third parties. Digitization is a challenge in this area and there are several ways to analyze and improve communication and collaboration efficiency.
In business strategies and projects, it is important to structure and review the things in front of us in an organized way to make progress. Focus should be on the lessons learned from communication processes and performance demonstrated in business with suppliers