TITLE:
Indirect Procurement: A Literature Review and Study of Trends
AUTHORS:
Dan Israel, Sime Curkovic
KEYWORDS:
Indirect Procurement, Indirect Spend, MRO, Information Technology, E-Procurement, COPC Inc.
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.10 No.4,
April
21,
2020
ABSTRACT: Indirect procurement is a diverse and crucial component of purchasing that has been largely ignored by scholarly research, due to representing only a small portion of manufacturing firms’ expenditures. Indirect purchasing also suffers from confusing nomenclature that makes drawing conclusions from multiple sources difficult. Proper management of indirect spending allows for sustainable competitive advantages and reduced costs. By performing a keyword search in multiple comprehensive databases, we analyzed, consolidated, and summarized the current areas of research as it pertains to indirect procurement. We also identified areas for future research by identifying gaps from our analysis. We find that much of the current research has focused on the procurement of Maintenance, Repair, and Operating (MRO) items and Information Technology (IT). MRO purchasing was also found to have confusing nomenclature, as the term can be used to refer to very different types of purchases. We make distinctions between these types and draw conclusions accordingly. For both MRO and IT research, we found that most research focuses on supplier relationship management, as well as the optimal degree of employee involvement in these purchases. While many studies stress the importance of properly managing indirect suppliers and engaging all stakeholders in indirect purchasing decisions, very few provide a successful framework for doing so. This paper serves multiple purposes. First, it seeks to consolidate and provide new definitions for indirect procurement terms in order to make future scholarly research easier. Second, it seeks to understand what research has been completed already in this field, and synthesizes the research into meaningful groups. Finally, it identifies areas for future research. This is an important endeavor because we seek to summarize and refocus a burgeoning field of study, allowing future researchers to easily understand what has already been studied.