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Procurement vs. Purchasing

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  • Procurement vs. Purchasing

    Your thoughts on the difference and the work strings involved would be most welcome.

  • #2
    Re: Procurement vs. Purchasing

    Originally posted by WendyFishel View Post
    Your thoughts on the difference and the work strings involved would be most welcome.
    Wendy,

    For my own thoughts for what they are worth, at first thought they are one and the same, but I like to feel that there is a fundamental difference, that being that Purchasing is the art of simply buying froma vendor, the nature of purchasing is that you understand your demand, understand your vendors constraints and place orders appropriately.

    Procurement in my mind is much more in depth, with regards to negotiations, costings, supply management, and sourcing...

    But as said, just my thoughts.

    SJ

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    • #3
      Re: Procurement vs. Purchasing

      I think that is the generally accepted difference.

      Procurement is more strategic, related to sourcing issues around vendor selection, setting up contracts, negotiating pricing and the like.

      Purchasing is more transactional and really involves the actual 'buying' within the boundaries already set up by procurement. This element is often called 'merchandising' in retail businesses.

      Depending on the size of the organisation, procurement and purchasing might be combined.
      Regards

      Top Link - Site Founder

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      • #4
        Re: Procurement vs. Purchasing

        thx for the info

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        • #5
          Re: Procurement vs. Purchasing

          To me,

          Purchasing is a simple term for those who do not understand procurement.

          Whereas Procurement is used when you are dealing with highly intellectual people. :P

          The bottom line is still the same, except as mentioned there are some differences.

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          • #6
            Re: Procurement vs. Purchasing

            Hi Wendy,

            I've always struggled with knowing the difference! I stumbled upon this article that has helped me a lot, check it out when you have a chance: https://blog.procurify.com/2014/02/0...nd-purchasing/

            -Jess

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            • #7
              Re: Procurement vs. Purchasing

              Procurement is the process of acquiring all the goods and services that are important to an organization. It deals with sourcing activities, negotiation of contracts and actual purchasing of goods.
              Purchasing refers to buying of goods or services. It is a subset of procurement.
              Hope this helps you.

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              • #8
                It may just be the terminology but in our business culture purchasing refers to the act of buying while procurement is a more formal act that involves paper work. In our office, procurement would normally undergo the requirement of finding at least 3 sources with the quoted costs to choose from. For the chain supply industry I guess there is a standard method of procurement to ensure the economic side of the purchases.

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                • #9
                  Originally posted by Corzhens View Post
                  It may just be the terminology but in our business culture purchasing refers to the act of buying while procurement is a more formal act that involves paper work. In our office, procurement would normally undergo the requirement of finding at least 3 sources with the quoted costs to choose from. For the chain supply industry I guess there is a standard method of procurement to ensure the economic side of the purchases.

                  I think that's a fairly common view. Procurement finds the suppliers and arranges the contracts. Purchasing buys.
                  Regards

                  Top Link - Site Founder

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                  • #10
                    On a mere look at procurement and purchasing, one can just summarily put that they are the same with one end effect which is paying for something you want to or need to be in your possession. This is absolutely true no matter how you look at it because they both involve paying for something.

                    Now, having pointed out the relationship between procurement and purchasing, it's equally very important to highlight the difference between the two concept in other to have a better understanding of what both offers.

                    ​​​So, when it comes to procurement, it's not as a simple as going to a supermarket or shopping mall to pick out items and move straight to the counter and pay for them. That's purchasing but never procurement. When one gets into the act of trying to procure, a detailed assessment of the needed product is carried, how its produced, method of transport, what the competition offers and so on before an agreement is struck to finalize the deal.

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