Purchasing Jobs Vs Procurement Jobs
Purchasing Jobs Vs Procurement Jobs - Procurement can be defined as the overarching role that clearly describes processes and activities involved in the acquisition of goods and services.
Many people often use the term purchasing and procurement interchangeably. This is not correct. Procurement involves activities, which makes it clearly distinct from buying.
Unlike buying, procurement involves activities of establishing requirements which are fundamental to the acquisition process, activities of sourcing which entails vendor evaluation and market research, negotiation and evaluation of contracts.
Procurement may also involve activities required in the purchasing process of ordering and receiving goods.
On the other hand, purchasing entails just the process of ordering and receiving goods. As such, buying is just a subset of a wider process of procurement.
Therefore, buying can be said to comprise just the process involved in ordering goods which may involve making a request, approval, creating a purchase order (P.O) record and receipt of goods.
Procurement as a process is used by individual businesses to source and purchase goods and services to use in their production. Different businesses set policies to be followed in their procurement processes.
These govern how suppliers are chosen, quality of products to be purchased, products and methods to be employed in communication with suppliers. Many business companies set procedures to employ in calling for proposals and even their evaluation.
Procurement involves wide range of issues which can give a clearer understanding of its definition. These include:
- Setting policies to be used in proposal evaluation, suppliers and quotes
- Identifying various needs of suppliers and customers
- Choosing appropriate communication tools and preparing them for use with the suppliers.
- Coming up with quotation proposals and requests
Therefore, procurement can generally be defined as a process that a company uses in acquiring goods, services and works, which covers acquisition from a third party or parties and also from providers who can be in-house.
Generally, procurement is a process that spans the entire life cycle starting from needs identification, all the way to the end of a contract for services provision or end of an asset’s useful life. It entails appraisal of options and the critical decision of buying the goods or services.
Since procurement entails adherence to set regulations by the authorities in place, it can also be defined from that perspective. As such, procurement can be understood to mean, the complete process or action of obtaining material, personnel, property or services from another territory using means that are authorized by pertinent directives.
Moreover, procurement can precisely refer to the action of obtaining goods, services, property or material at a company’s operational level. This may involve negotiating, contracting and purchasing as said earlier.
These processes in most cases are transacted directly with the supply source and have to adhere to the set rules and regulations.
However, it is important to note that procurement definitions are changing every now and then. Environmental purchasing is one trend that is very strong in the procurement process. This implies that companies are becoming more interested in products which are friendly to the environment and least packaged.
Therefore, how goods are manufactured, packaged and distributed is going to affect procurement definition greatly.