What is Indirect Materials?

Indirect materials are goods that, while part of the overall manufacturing process, are not integrated into the final product. For example, disposable gloves, personal protective equipment, tape, etc., may be essential to a production line, but they are not part of the actual product created on that line.

When cost savings take priority, it’s important to control spending and compliance by using a unified source-to-pay (S2P) platform for indirect materials.

Among S2P platforms, cloud-native ones offer the best functionality: they are easy to set up, deploy, learn and use, and they offer real-time, end-to-end visibility.

Unlike indirect materials, direct materials are components that are integrated into a manufactured product. For example, chips in a mobile phone are direct materials in mobile phone production.

Related Terms

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