Difference Between Procurement And Purchasing

ARE PROCUREMENT SOURCING AND PURCHASING THE SAME? EXPLAIN

Many people use the terms purchasing and procurement interchangeably, but despite their similarities they do have different meanings. Let’s clarify any confusion on the difference between procurement and purchasing.

Procurement involves the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods. Procurement is concerned with acquiring (procuring) all of the goods, services and work that is vital to an organization. Procurement is, essentially, the overarching or umbrella term within which purchasing can be found Procurement is an umbrella term that includes several core business functions it

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The purchasing process

Purchasing is a subset of procurement. Purchasing generally refers simply to buying goods or services. Purchasing often includes receiving and payment as well.

Within the overarching Procure-To-Pay Cycle, the steps specifically related to purchasing are:1) Purchase Order Acknowledgement, 2) Advance Shipment Notice, 3)Goods Receipt 4) Invoice Recording, 5) 3 Way Match 6) Payment to Supplier .

Unlike the entire Procure-To-Pay Cycle, the steps explicitly related to purchasing should not be tailored to suit the size and scope of each individual business. These are fundamental steps of good purchasing and should be employed routinely as a best practice in all businesses.

Conclusion

Because purchasing is a process within the overarching procurement process, both procurement and purchasing are often used interchangeably. In the business world, the practice of using similar terminology in either conversation or printed materials is routine, although it is often confusing and should be

Logistics is generally viewed as within one company, although it manages flow between company and its suppliers and customers. It is also part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third-party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution—strategic, operational, and tactical. Logistics management is an integrating function that coordinates and optimizes all logistics activities with other functions, including marketing, sales, manufacturing, finance, and information