You may have used the terms “ procurement ” and “ purchasing ” interchangeably, just like most people do. Have you ever asked yourself if you are quite right in so doing? Does procurement mean the same thing as purchasing? Well, before the end of this article you will have an answer to these questions, follow through.
For you to understand if procurement and purchasing mean the same thing, you need to understand what each term means and what it entails.
What is Procurement?
Procurement is a systematic process of acquiring (at the best total cost of ownership) goods, works, and services for an institution – usually referred to as a procuring entity. It is a long-term strategy for acquisition to enhance successful business operations.
When properly aligned with the corporate strategy, the procurement strategy rationally focuses on long-term objectives and incredibly delivers a competitive advantage to the procuring entity.
Stages in a Procurement Cycle
- Need identification and demand planning
- Requisition of goods/works/services
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