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  • Provisioning, Procurement & Purchasing

    I get really confused over the difference between Provisioning, Procurement & Purchasing :-(

    Is there a simple definition somewhere?

    Tank

  • #2
    Re: Provisioning, Procurement & Purchasing

    Here's a go. Just my understanding. :-)

    Provisioning.

    Three elements to be considered when provisioning for a stock holding organisation:
    The Range - which items to stock.
    The Depth - What quantities of each items to hold.
    The Order Point - When to start the procurement cycle.

    Provisioning takes place when first introducing a product (initial provisioning) and then during replenishment. So it is really all about deciding how much to purchase and when to purchase.

    Procurement.

    The sourcing of suppliers, the negotiation of supply contracts, supplier performance monitoring etc. All about deciding who to buy from and at what price.

    Purchasing.

    The day to day buying activity. Processing of purchase orders etc.

    Hope that helps.

    Rob
    Rob O'Byrne
    Site Owner & Sponsor

    | Supply Chain Consultants | Supply Chain Conference | Supply Chain Education |

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    • #3
      Re: Provisioning, Procurement & Purchasing

      Thanks Rob. Often got confused about that myself :-(

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      • #4
        Re: Provisioning, Procurement & Purchasing

        Originally posted by Tank View Post
        I get really confused over the difference between Provisioning, Procurement & Purchasing :-(

        Is there a simple definition somewhere?

        Tank
        I think many people get confused over this.........particularly senior managers

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