Difference Between Procurement and Purchasing
I haven’t shared on Qatar jobs in a while, but today I’m being asked to share about the differences between “procurement” and “purchasing.” Many people who message me want to know what the difference is between these two words. So, I’ll try to answer that question today.
People use the words “procurement” and “purchasing” to mean the same thing. But even though they look identical, they mean something different. One looks at things like the strategic process of sourcing products and services, while the other looks at transactional functions.
In this post, I’d like to clear up any confusion about the difference between “procurement” and “purchasing” and try to get to the bottom of what each word means.
What is PURCHASING?
Purchasing is the act of getting a good or service in a business. Most of the time, buying and selling happen right away on a daily basis. This usually includes how a buyer orders something and pays for it. For instance, by making and filling purchase orders and making sure goods are paid for.
Purchasing is usually more about the here and now and less about the long term. It includes things like ordering, putting together purchase orders, receiving, and setting up payment. Purchaser often look for the best price instead of the best value when they buy something.
What is PROCUREMENT?
Procurement, on the other hand, is the process of finding and acquiring the goods and services a business needs to meet its business goals. These goods and services usually come from a third-party vendor or supplier.
Many things can be done with a good procurement jobs in qatar strategy. For example, a company can save money by negotiating reasonable terms and prices. It can also make sure that suppliers are good, efficient, and on time.
Procurement is a long-term, all-encompassing way for a business to get goods and services. It includes tasks like finding vendors, negotiating contracts, and keeping records. The difference between purchasing and procurement is that procurement looks at more than just the price. It focuses on improving relationships with suppliers that are good for both sides.
What’s the difference between PROCUREMENT and PURCHASING?
Basically, when a company needs to buy goods and services, you do both procurement and purchasing. But these two activities have different goals and use different methods to achieve those goals. Here’s a table that shows how procurement is different from purchasing.
Total Cost of Ownership (TCO)
TCO and creating value is a key idea in procurement. TCO is the price of the item plus the cost to use it over its lifetime. TCO looks at more than just the price of an item. It takes things like shipping, training, and maintenance into account.
I hope this explanation makes it clear to you what the differences are. In my next post, I’ll share how the conventional procurement vs. e-procurement process works.
