Wednesday, October 25, 2023

Differences procurement and purchasing?

Q.      What are the differences between procurement and purchasing?

 

Procurement

Purchasing

Definition

Procurement is hiring or purchasing anything by any contractual means. 

Purchasing is part of the procurement. 

Scope

procurement may not be purchasing

All purchasing means procurement

Timeframe

Purchasing is typically short-term and focused on immediate needs

Procurement takes a longer-term view and involves strategic planning.

Nature

Procurement is basically complex in nature. 

purchase may be simple in nature.

Supplier Relationships

Seeks to find new suppliers and build ongoing relationships. 

Tend to work with an existing supplier.

Focused

More focused on value and total cost of ownership. 

More focused on price and lowest cost per unit.

Deals

Deals with why a good or service is ordered and from where.

Deals with how goods and services are ordered.

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