6 Indirect Procurement Best Practices to Streamline the Sourcing Process

Indirect procurement covers all goods and services that keep your organization running, from MRO supplies and facility management to IT equipment and office essentials. While these purchases don’t end up in your finished product, they account for a significant share of operating costs and directly affect day-to-day efficiency.

For enterprise and industrial buyers, a fragmented or ad hoc approach to indirect procurement can quickly lead to uncontrolled spend, supply disruptions, and missed savings opportunities. Streamlining indirect procurement is crucial, not just for cost control, but for operational resilience and competitive advantage.

In this blog, you’ll find a focused set of high-impact indirect procurement best practices, each backed by real-world examples from leading organizations. These indirect procurement strategies will help you control spend, improve sourcing decisions, and build a more efficient indirect procurement function.

Indirect Procurement Best Practices

The following indirect procurement best practices offer practical ways to support streamlined procurement and improve overall sourcing performance.

1. Centralized Spend Visibility

Centralizing spend data for indirect materials, services, and other operating purchases across departments, sites, and business units gives procurement teams a clearer view of where money is being spent. This approach supports indirect procurement benchmarking by allowing you to track and analyze spending on indirect goods and services across locations and categories.

With full spend visibility, procurement teams can quickly identify redundant suppliers, spot off-contract purchases, and reveal hidden opportunities for category consolidation. Accurate data supports better decision-making, strengthens compliance, and supports a more structured strategic procurement approach.

Real World Example:

A real-world example of this approach comes from Jabil, a leading electronics manufacturer. Managing over $6 billion in annual spend across more than 100 global locations, Jabil recognized that a lack of spend visibility was costing them billions in unmanaged indirect purchases. By rolling out a single cloud procurement platform across 125 sites, they brought about 90% of their total spend under centralized control. This full visibility allowed Jabil to quickly identify maverick spend, enforce compliant buying, and drive cost savings through consolidated supplier contracts, turning procurement into a true competitive advantage.

2. Supplier Rationalization

To drive efficiency in indirect procurement, regularly review and streamline your supplier base—it’s not just a nice-to-have; it’s critical. By consolidating suppliers across indirect categories like MRO, office supplies, facility services, and electronics, you eliminate unnecessary complexity and minimize redundant contracts. Supplier rationalization also supports indirect strategic sourcing by making it easier to enforce compliance, negotiate favorable terms, and build stronger long-term supplier relationships.

This approach pays dividends on multiple fronts. It simplifies administration, amplifies your purchasing power, and enables closer supplier collaboration, leading to faster issue resolution and a steady pipeline of innovation. Ultimately, supplier rationalization ensures your procurement strategy supports broader business goals, not just short-term transactions.

Real World Example

A standout example is Guild Mortgage, a fast-growing U.S. lender. As the company expanded from 70 to 160 branches, each location used its local vendors for everything from paper to breakroom supplies. The result was an unwieldy vendor list and inconsistent pricing. By partnering with a single supplier, Guild reduced its supplier count from 20 to just 1 for core supplies. The impact was immediate: administrative processing dropped by 80%, and the company saved $30,000 each month thanks to standardized pricing and centralized purchasing.

3. Digitalization and Process Automation

Building on supplier rationalization, digitalization and process automation make indirect procurement more efficient and consistent. Adopting indirect procurement solutions such as e-procurement platforms, automated approval workflows, and digital catalogs streamlines sourcing for everything from MRO supplies to facility services and electronics.

Digital tools give procurement teams real-time visibility into indirect spend and supplier performance. Automation reduces manual entry, minimizes errors, and speeds up the indirect procurement process from requisition through order fulfillment. A digital platform also helps enforce compliance, reduce off-contract buying, and respond faster to changing business needs. This not only accelerates cycle times but also frees up your team to focus on higher-value procurement initiatives.

Real World Example

A global industrial manufacturer (AAR Corp) implemented an e‑procurement platform to automate indirect sourcing. By digitizing requisitions and auctions, AAR cut its sourcing cycle time by 50%. In practice, the company now “gets to market in days instead of weeks” by using automated sourcing templates and workflows. This rapid turnaround (vs. the old multi-week process) greatly improved end-user satisfaction and overall efficiency in indirect procurement.

4. Category Management

As your indirect procurement function matures, dedicated category management can bring greater control to key areas such as IT, facilities, MRO, and HR-related spend. Category managers work directly with internal stakeholders to identify specific needs, understand service requirements, and analyze purchasing and usage patterns.

Category management allows procurement teams to develop an indirect procurement category strategy around each major spend area. This improves cost control, reduces supplier and sourcing risks, and keeps procurement decisions aligned with operational requirements and business goals. This approach also strengthens supplier relationships and helps identify opportunities for continuous improvement that generic, transactional buying can’t match.

Real World Example

A good illustration comes from Wolverine Worldwide – a US-based footwear/apparel manufacturer, which reorganized its indirect procurement by category. Wolverine’s procurement team partnered with a consulting firm (GEP) to create category-focused managers for key indirect spend areas. For example, GEP first tackled the Air Freight category: after standardizing specifications and running competitive sourcing, Wolverine achieved over 14% cost savings on air freight in just three months. Encouraged by that success, Wolverine expanded the program: today, about 80% of its indirect spend is centrally managed through this category approach, yielding “savings worth millions of dollars.”

5. Liquidation-Based Procurement

As you look to streamline the sourcing process further, consider integrating liquidation-based procurement as a formal best practice. Once you have centralized spend visibility and optimized supplier relationships, surplus and liquidation channels can provide another option for indirect materials sourcing.

Buying through liquidation channels allows you to access high-quality assets at significant discounts compared to new purchases. This approach not only reduces procurement costs but also helps you source hard-to-find or discontinued items quickly, minimizing downtime and supporting business continuity. Leveraging surplus markets contributes to sustainability goals by extending the lifecycle of assets and diverting usable equipment from landfills.

Real World Example

Airlines and defense buyers using surplus/USM parts see huge discounts. For instance, Oliver Wyman reports that DoD saved 32.5% on one engine overhaul’s material costs by using certified used parts.

6. Internal Asset Redeployment

Internal redeployment is a practical extension of your indirect procurement strategy. Instead of defaulting to external suppliers or liquidation markets for every need, proactively audit and repurpose idle or underutilized assets already within your organization. This approach directly supports procurement objectives by reducing the need for new purchases, improving spend control, and providing faster access to required resources.

For indirect categories such as MRO (maintenance, repair, and operations) parts, IT equipment, or office supplies, internal redeployment reduces MRO indirect spend, shortens lead times, and supports sustainability goals by extending asset life. When integrated with your procurement workflows and supported by centralized inventory tracking, internal redeployment transforms what could be a cost center into a source of measurable value.

Real World Example

During a fast-turnaround facility shutdown, one large manufacturer partnered with an asset recovery firm to redeploy over $250,000 worth of equipment internally, avoiding new purchases and keeping projects on track. The remaining surplus was then auctioned, generating an additional $800,000 in value.

Conclusion 

Indirect procurement, while often overlooked, has a direct and measurable impact on your organization’s cost structure and operational efficiency. As real-world examples throughout this blog show, organizations that centralize spend data, rationalize their supplier base, automate procurement workflows, introduce category management, and integrate liquidation-based sourcing consistently outperform their peers in both cost savings and agility.

Adopting these indirect sourcing strategies helps move indirect procurement from a fragmented back-office function toward a more structured source of business value and resilience. With increased visibility, tighter supplier relationships, and digital efficiency, your team can unlock savings, mitigate risks, and deliver reliable support for core operations, no matter how complex or distributed your business becomes.

To further improve your results, consider working with indirect procurement providers, technology platforms, and sourcing experts that offer specialized tools, market access, and guidance across different stages of the sourcing process.