Purchasing, Procurement and

Supply chain management

The World of Business uses the procurement and Purchasing and supply chain management

meaning of the same meaning; Are they really all the same?

In fact the answer it will be “no“; procurement and Purchasing and

supply chain management Both of them carry different meanings and tasks and this is what will be explained !!

First the Procurement

Procurement is the process of getting the goods and services your company needs to fulfill its business model.

In the overall supply chain process, the procurement function stops once your company has possession of the goods. For a business to make a profit, the cost of procuring your goods must be less than the amount you can sell the goods for, minus whatever costs are associated with processing and selling them.

Purchasing is a subset of procurement

Purchasing refers to buying goods or services and often includes receiving and payment.

The steps related to purchasing within the procurement cycle are:

• Purchase Order Acknowledgement
• Advance Shipment Notice
• Goods Receipt
• Invoice Recording
• Three Way Match
• Payment to Supplier

In the end, we will talk about: supply chain management

A supply chain is defined as:

‘Everybody involved in getting your product into the hands of a customer. It includes raw material gatherers, manufacturers, transportation companies, wholesale warehouses, in-house staff, stock rooms right down to the employee at the register. It also includes the tasks and functions that contribute to moving that product, such as quality control, marketing, procurement, and sourcing.

Using the above analogy, the supply chain can be considered the entire chair, while procurement and sourcing are parts of the chair.’

In summary, Procurement is the process of getting the goods you need, while Supply Chain is the infrastructure (extensive, in many cases) needed to get you those goods.