Direct spend refers to the costs associated with raw materials, components, and finished goods that are used to create a final product. Direct spend is typically managed by the sourcing and procurement teams within a manufacturing or production organization. This type of spend is critical to the success of manufacturing and production companies as the cost of raw materials, components and finished goods can have a significant impact on the company's bottom line. 

Companies that heavily rely on direct spend, such as manufacturers of consumer goods, automotive, aerospace, and construction companies, can effectively streamline their procurement process with advanced direct materials procurement software.

• Consumer goods manufacturers such as Procter & Gamble, Unilever, and Nestle have direct spend on raw materials used to make their products such as packaging materials, ingredients, and others. According to the data, in 2019 Procter & Gamble had a direct spend of $13 billion, which was about 50% of the company's total spend. 
• Automotive manufacturers such as General Motors, Ford, and Toyota have direct spend on raw materials and components used to make their cars such as steel, tires, and electronic components. According to the data, in 2019 General Motors had a direct spend of $18 billion, which was about 70% of the company's total spend. 
• Aerospace manufacturers such as Boeing, Airbus, and Bombardier have direct spend on raw materials and components used to make their planes such as aluminum, titanium, and electronic components. According to the data, in 2019 Boeing had a direct spend of $9 billion, which was about 70% of the company's total spend. 
• Construction companies such as Bechtel, Fluor, and Aecom have direct spend on raw materials such as steel, cement and other construction materials. According to the data, in 2019 Bechtel had a direct spend of $2 billion, which was about 30% of the company's total spend. 

In these cases, direct spend has a significant impact on the company's bottom line, as the cost of raw materials, components, and finished goods can be a major determinant of overall production costs. Therefore, it is crucial for these companies to have well-managed and optimized sourcing and procurement processes, supported by robust direct materials procurement software, to ensure they obtain the best possible value for their direct spend.

FactWise, a comprehensive, end-to-end source-to-pay platform, specializes in optimizing direct materials spend for global product manufacturing companies across industries. With its advanced direct materials procurement software, FactWise offers holistic supplier insights, streamlines processes through automation, and unlocks savings potential to drive significant bottom-line impact. At FactWise, our mission is to delight users and deliver sustainable positive impact to the organizations we have the privilege to serve.