The Connection Between Purchasing And Procurement
Purchasing and procurement are two distinct yet interconnected aspects of supply chain management, each serving a unique role in acquiring goods and services for an organization.
Purchasing:
Purchasing is a transactional and tactical function within an organization. It involves the actual buying of products or services needed to meet immediate requirements. Purchasers typically focus on obtaining goods at the best possible price, quality, and terms from suppliers. Their primary goal is to ensure timely delivery of materials to support ongoing operations. Purchasing decisions are often short-term and reactive, driven by immediate needs and market conditions.
Procurement:
Procurement, on the other hand, is a strategic and broader function that encompasses the entire process of acquiring goods and services. It involves a systematic approach to identifying suppliers, establishing long-term relationships, and optimizing the supply chain for the organization’s overall benefit. Procurement professionals are responsible for supplier selection, negotiation, and contract management. They consider factors such as total cost of ownership, supplier performance, and risk management. Procurement decisions are long-term and strategic, aligning with the organization’s goals and objectives.
In summary, purchasing focuses on the day-to-day buying of goods and services, while procurement takes a holistic approach, looking at the bigger picture to drive strategic value for the organization.
