Direct spend is tied to cost of goods sold and is usually owned by category managers with deep technical knowledge. Indirect spend covers everything else — travel, MRO, professional services, software — and tends to be more fragmented across business units. Both benefit from competitive events, but the levers differ.
Lexicon entry
Direct vs. Indirect Spend
Direct spend buys what goes into the product (raw materials, components); indirect spend buys what runs the business (IT, facilities, services).