Difference Between Purchasing and Procurement in Supply Chain Management

Published by westfordadmin at April 6, 2016

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People use the terms purchasing and procurement in similar contexts but there are some major differences between them.

Procurement is the set of activities and processes for acquiring goods and services. The activities involving fundamental requirement establishment does not comes under purchasing. Also activities related to sourcing like market research evaluation of vendors and negotiation of contracts does not comes under Purchasing.

The term purchasing generally means the process of ordering and receiving products and services. The process involved in purchasing include a request for goods, approving and making of record for purchase and receiving products.

Procurement generally includes the part of an organization which is including non-pay expenditure, the various process for getting products and services from other parties. This includes identifying the requirements, meeting the specifications, assessing risks, managing tendering, ordering etc.