In the supply chain context, “direct materials” refer to the raw materials or components directly used to produce a finished product. For example, in manufacturing a smartphone, the direct materials would include components like the screen, processor, battery, camera, and other essential parts that make up the device.
In addition, many organizations also use a range of partners, including contract manufacturers, original design manufacturers, assembly, test, packaging, tooling/equipment manufacturers, logistics/operations partners, and specialized service providers as part of the Direct Material and related Manufacturing Supply Chain.
Many of the direct material supply chain partners fall in the Strategic Category
and as a result, require significant coordination and collaboration throughout the Supplier Relationship lifecycle
We also observed that a close and cross-functional collaboration approach is needed to work effectively with Direct Supply Chain partners. Many different processes are used to support cross-functional collaboration with Direct Supply Chain partners. Below are a few
