Procurement vs Purchasing
Content
1. Introduction 1.1 The need for purchasing and procurement 1.2 The process of procurement
1.3 The process of purchasing.
2. Procurement. 2.1 supplier selection
2.2 supplier base management -Early supplier involvement -Supplier Development -Supplier Association
2.3. Supplier Relationship 2.4 vendor Managed Inventory
3. Purchasing. 3.1 objectives
3.2 E procurement and E purchasing 3.3 Just in time
3.4 procure to pay 3.5 types of purchases
4. Conclusion.
5. Reference.
Introduction
The need for acquiring materials or assets for an organization is fundamental to their business operations. Creating strategies and methods to procure the best materials at the most cost efficient ways and to maintain the same can be only put to practice with a dedicated procurement and purchasing functions. The terms purchasing and procurement are often interchanged, but they do differ in scope. Procurement is much wider term and it is a strategic element when compared to purchasing. Purchasing is the functional part of procuring materials for the organization. “Procurement can be broadly defined as all the planning, analyzing and measures taken to acquire goods and services required to run the organization smoothly.” Procurement can be of two types direct and indirect. Direct procurement involves the acquisition of raw materials and goods required for production. Indirect procurement involves the acquisition of maintenance, repairs and operating supplies. Procurement and purchasing together is responsible in fulfilling the input needs of the organization. The history of procurement dates back to the times of Egyptians. During that time, the Egyptians for their huge pyramid projects tracked the supply of building materials and workers. In modern era, procurement gained importance with the industrial revolution. Procurement dates back before 1900’s when purchasing was independent function
1. Introduction 1.1 The need for purchasing and procurement 1.2 The process of procurement
1.3 The process of purchasing.
2. Procurement. 2.1 supplier selection
2.2 supplier base management -Early supplier involvement -Supplier Development -Supplier Association
2.3. Supplier Relationship 2.4 vendor Managed Inventory
3. Purchasing. 3.1 objectives
3.2 E procurement and E purchasing 3.3 Just in time
3.4 procure to pay 3.5 types of purchases
4. Conclusion.
5. Reference.
Introduction
The need for acquiring materials or assets for an organization is fundamental to their business operations. Creating strategies and methods to procure the best materials at the most cost efficient ways and to maintain the same can be only put to practice with a dedicated procurement and purchasing functions. The terms purchasing and procurement are often interchanged, but they do differ in scope. Procurement is much wider term and it is a strategic element when compared to purchasing. Purchasing is the functional part of procuring materials for the organization. “Procurement can be broadly defined as all the planning, analyzing and measures taken to acquire goods and services required to run the organization smoothly.” Procurement can be of two types direct and indirect. Direct procurement involves the acquisition of raw materials and goods required for production. Indirect procurement involves the acquisition of maintenance, repairs and operating supplies. Procurement and purchasing together is responsible in fulfilling the input needs of the organization. The history of procurement dates back to the times of Egyptians. During that time, the Egyptians for their huge pyramid projects tracked the supply of building materials and workers. In modern era, procurement gained importance with the industrial revolution. Procurement dates back before 1900’s when purchasing was independent function