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Thread: Difference between Purchasing,Procurement and Supply Chain

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    Default Difference between Purchasing,Procurement and Supply Chain

    What is the difference between Procurement, Purchasing and Supplychain.

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    Quote Originally Posted by tly View Post
    What is the difference between Procurement, Purchasing and Supplychain.
    Dear friend,

    Supply Chain is a system of organisation with different activities whose final goal is purchasing, inventory management, consumer service. In brief, supply chain helps an end user to get a product or service from the manufacturer is a systematic fashion. Purchasing and procurement are part of suppy chain management and they are similar terms that are commonly used in the field of supply chain. There is no difference between these terms.

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    Quote Originally Posted by rainbow View Post
    Dear friend,

    Supply Chain is a system of organisation with different activities whose final goal is purchasing, inventory management, consumer service. In brief, supply chain helps an end user to get a product or service from the manufacturer is a systematic fashion. Purchasing and procurement are part of suppy chain management and they are similar terms that are commonly used in the field of supply chain. There is no difference between these terms.
    I would only add that Procurement is generally thought of as being more strategic. i.e. Sourcing suppliers, setting up and managing supplier agreements, negotiating pricing / contracts and the like.

    Whereas Purchasing tends to be regarded as the day to day activity of 'buying'. i.e. buying from suppliers, based on the pricing / terms set up by the procurement function.

    In smaller businesses, the two are often the same thing.
    Regards

    Top Link - Site Founder

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    Hi,

    I fully agree with TL. Besides that, the SRM - Supplier relationship management, is an activity of Procurement/Purchasing and it is responsible for decide and plan about some issues such as: what level collaborate with each supplier, with which suppliers maintain close relationships and how to share resources and information. It is a very strategic activity in SCM.

    Kind regards,

    Patricia Guarnieri

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    I think the definitions will always vary depending on which part of an organisation you are sitting in......

    I know many people in procurement for example, who do not see that function as a sub set of Supply chain at all! In fact they are horrified by the idea. Their view is often that it is on the same level as Supply Chain reporting in directly to the CEO. In most businesses that would certainly not be the case. Though in some Government organisations, given the importance of procurement (huge spend) that might indeed make sense.
    Regards

    Top Link - Site Founder

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    I agree both the terms procurement and purchasing are the part of supply chain and supply chain is well explained above, it is a term which includes many types of processes in it.

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    It is the info I need. The comments above are very helpful!

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    Procurement is concerned with the overall gathering of resources, while purchasing is the specific act of acquiring something by paying money for it. Purchasing is one form of procurement

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    Default Re: Difference between Purchasing,Procurement and Supply Chain

    Procurement: When an external source is used to acquire goods or services required to meet the requirements of an organization, it is referred as procurement. In addition to cost; quality, quantity, time& location are additional factors while deciding on procurement. Procurement typically includes Expediting, Supplier Quality check, and Traffic and Logistics (T&L) in addition to Purchasing.

    Purchasing: Purchasing is a subset of procurement. It basically refers to acquiring goods and services required to meet the needs of organization. The sourcing can be done either form an internal source or an external source.

    Supply chain: As per the council of supply chain management professionals, Supply chain is the planning and management of all the activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers.

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    Post Re: Difference between Purchasing,Procurement and Supply Chain

    nice thread, thanks for that

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