A Direct Category refers to spend on items that are directly linked to the production of goods or

delivery of services. For manufacturers, this includes raw materials, components, and items required

in high volumes that form part of the finished product. These categories are critical because supply

disruptions or price volatility can have significant impacts on production and customer delivery.

Conversely, Indirect Categories refer to goods and services not directly linked to production, such as

cleaning services, IT systems, or office supplies. Effective management of direct categories often

involves long-term supplier relationships, strategic sourcing, and risk management. Since they

directly affect business continuity, procurement strategies must prioritise availability, cost stability,

and quality. Category managers often use Kraljic’s Matrix and forecasting tools to design robust

sourcing strategies for direct categories.

Reference: CIPS L5M6 Study Guide, p.4