People use the terms interchangeably: Purchasing and Procurement
Many people use the terms purchasing and procurement interchangeably but despite their similarities, they do have different meanings. Let’s define them and clarify any confusion on the differences
Purchasing: Purchasing
is a set of activity involved to acquire materials, equipment and services.
Purchasing involves tasks such as issuing purchase orders, receiving the goods
or services and arranging payment to the suppliers. Although there are several
organizations that attempt to set standards in the purchasing process, and it
can vary between organizations.
Procurement: Procurement tends to be
broader and more proactive, with some focus on strategic matters, as compared
with the typical implementation of the purchasing concept. Procurement is the
process of planning, sourcing, contract award and management which needs to
fulfil company’s business model.
broader and more proactive, with some focus on strategic matters, as compared
with the typical implementation of the purchasing concept. Procurement is the
process of planning, sourcing, contract award and management which needs to
fulfil company’s business model.
Difference between Purchasing and Procurement
Procurement and purchasing are both performed
when a company needs to acquire goods and services. But these two functions
have different focuses and different methods for achieving their respective end
goals. Following table that explains the differences between procurement
and purchasing
when a company needs to acquire goods and services. But these two functions
have different focuses and different methods for achieving their respective end
goals. Following table that explains the differences between procurement
and purchasing
