Procurement vs Purchasing | Difference between Procurement and purchasing

00:02:48
https://www.youtube.com/watch?v=Hsq-oqlLP0A

Résumé

TLDRIn this video, the distinction between procurement and purchasing is explained clearly. While both terms are often confused, procurement is described as the strategic process of identifying and acquiring goods or services, encompassing everything from need recognition to sourcing and contract closure. In contrast, purchasing is a narrower function primarily concerned with the actual buying of goods and services, involving tasks like ordering and payment. The video highlights that procurement seeks to create long-term relationships with suppliers, while purchasing prioritizes transactional efficiency.

A retenir

  • 🔍 Procurement identifies and shortlists goods.
  • 💼 Purchasing is a subset of procurement.
  • 📈 Procurement is strategic and proactive.
  • 💰 Purchasing is reactive and transactional.
  • 🔑 Procurement values items more than price.
  • 📝 Purchasing focuses on ordering and expediting.
  • 🤝 Procurement seeks long-term supplier relationships.
  • ⚙️ Purchasing involves payment fulfillment.

Chronologie

  • 00:00:00 - 00:02:48

    The video outlines the difference between procurement and purchasing, which are often confused terms. Procurement is a comprehensive process that includes identifying, selecting, and acquiring goods or services, focusing on value and strategic relationships with vendors. It involves activities like need recognition, sourcing, and contract management. In contrast, purchasing is a more narrow function centered on the actual transaction of buying, prioritizing cost over value, and includes tasks like ordering and payments. Overall, while procurement is proactive and strategic, purchasing is largely reactive and transactional.

Carte mentale

Vidéo Q&R

  • What is procurement?

    Procurement refers to the process of identifying, shortlisting, selecting, and acquiring suitable goods or services from a third-party vendor.

  • What is purchasing?

    Purchasing is a subset of procurement focused specifically on acquiring goods and services, including ordering, expediting, receiving, and fulfilling payment.

  • What is the main goal of procurement?

    The main goal of procurement is to identify a company's needs and fulfill the procurement of those needs strategically.

  • What is the main goal of purchasing?

    The main goal of purchasing is to arrange company expenditure effectively and buy goods and services.

  • How do procurement and purchasing differ in their focus?

    Procurement focuses on the value of items, while purchasing is more focused on price.

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Sous-titres
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Défilement automatique:
  • 00:00:00
    hi welcome to education leaves
  • 00:00:03
    in this video i am going to discuss the
  • 00:00:05
    difference between procurement and
  • 00:00:07
    purchasing
  • 00:00:09
    let's start the video procurement and
  • 00:00:13
    purchasing are the two terms that are
  • 00:00:14
    often used interchangeably
  • 00:00:17
    if you ask a layman about the difference
  • 00:00:19
    you may get a reply that purchasing and
  • 00:00:21
    procurement are one and the same
  • 00:00:23
    but if you ask the same question to a
  • 00:00:26
    manager
  • 00:00:26
    you'll get a significantly longer answer
  • 00:00:28
    as to how
  • 00:00:29
    and why there's a world of differences
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    between purchasing and procurement
  • 00:00:35
    let's discuss what is procurement
  • 00:00:37
    procurement refers to the process of
  • 00:00:39
    identifying
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    shortlisting selecting and acquiring
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    suitable goods or services from a
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    third-party vendor through direct
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    purchase
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    competitive bidding or tendering process
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    while ensuring timely delivery of the
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    right quality and quantity
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    what is purchasing purchasing is the set
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    of functions associated with acquiring
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    the goods and services that an
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    organization requires purchasing is a
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    small subset of the broader procurement
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    function
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    this process includes activities like
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    ordering
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    expediting receiving and fulfilling
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    payment
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    lets explains the differences between
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    procurement and purchasing
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    the end goal of procurement is to
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    identify the company's needs and fulfill
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    the procurement of those needs
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    it is a strategic and proactive process
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    on the other hand the end goal of
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    purchasing is to arrange company
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    expenditure and buy goods and services
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    for the company
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    it is a reactive process
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    in procurement places more importance on
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    an item's value than how much it costs
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    but in purchasing more focused on price
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    than value
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    procurement involved in the end-to-end
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    activities that needed to acquire all
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    necessary goods and services
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    procurement does everything from need
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    recognition to sourcing
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    contract closure and record keeping
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    purchasing gets involved when it's time
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    to buy goods and services
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    tasks involved in purchasing our
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    ordering expediting
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    and payment procurement focused on
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    developing long-term and a win-win
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    relationship with suppliers
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    on the other hand purchasing focused on
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    making efficient transactions
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    not overly concerned with developing
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    vendor relations
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Tags
  • procurement
  • purchasing
  • difference
  • goods and services
  • vendor relations
  • business process
  • ordering
  • transaction efficiency
  • strategic process
  • financial management