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Procurement versus purchasing

Posted on Friday, February 6 by Registered CommenterDavid Rae in , | Comments2 Comments

In a good example of the powers of social networking, a blog written on this very site last year which focused on the differences between procurement and purchasing has been reborn on LinkedIn.com.

The debate is a fascinating one, and considering it's obviously still of interest and attracting a hatful of comments over on LinkedIn, I thought I'd repost some of the original article (it is Friday afternoon, afterall). I'd be interested to hear your comments.

"In late December I chaired a roundtable focusing on procurement talent. We discussed how the changing role of procurement has resulted in a considerable skills shortage within the profession. A number of interesting points were raised, however, the one that caused most debate was theissue of how the profession was perceived by the business world, and how this effected the attraction of new blood. Central to this, how the profession was named.

Procurement vs. Purchasing. In short, the consensus around the table was that ‘purchasing’ was still viewed by much of the business world as an administrative function, linked back to order management. Whilst ‘procurement’ steps away from the transactional side and is seen as more of a strategic function.

Here is a excerpt from the article:

Friedhelm Felten Maybe there’s a language issue here. When we want to set ourselves up in a strategic position in a company we use the word procurement. But you also hear the word purchasing. If I see the word purchasing I think of order management and so on. For me it's a key starting point. It’s about how you position yourself to the business community.

Manja Thiry There is a lot of confusion over this. The terms “procurement” and “purchasing” have been used interchangeably.

David Cowell The meaning is very similar. But we’ve moved to a different wording to identify a change in the organisation. A few years ago we were known as purchasing but we consciously decided to use the word procurement. It meant we were going to be strategic, we were going to do things differently and be part of the business connected to the other functions. One way of getting people’s attention to this was to change the name. But having done that, purchasing, by definition, becomes the transactional piece and procurement becomes the strategic piece.

Tom de Bruin It’s all part of making the role and function more sexy, of establishing a brand to attract talent.

So,what's in the name?

The point of this blog entry is to continue the debate. If anyone has anyfeed back or thoughts around this topic I love to hear them."

 

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Reader Comments (2)

There is, also, the debate on the differences between procurement and sourcing. Sourcing is seen at the supplier negotiation and resulting contract piece while procurement is the administrative actually get the purchase order placed piece.

Aren't they all a lot of ways to say the same thing?

I don't know...I'm asking....
February 6, 2009 | Unregistered CommenterKaren Fayeth
Purchasing by any other name is still the process of acquiring services or stuff to meet one's organization's,needs. One could say that purchasing is the process of conducting a procurment (or purchase).
December 15, 2009 | Unregistered Commenterdlmoody

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