PURCHASING AND PROCUREMENT (5 Rights of Procurement (Time, Place, Quality,…
PURCHASING AND PROCUREMENT
Purchasing refers to a business or organization attempting to acquire goods or services to ... “procurement”, since procurement typically includes expediting, supplier quality, and transportation and logistics (T&L) in addition to purchasing.
A procurement supply chain person is directly responsible for the purchasing or procurement of any product (i.e. raw materials, components in manufacturing), services (logistics or otherwise).
Purchasing vs Procurement
Purchasing is mainly used in a wholesale environment (external customers), whereas Procurement is mostly used in a production environment (internal customers). Both require mostly long term agreements and quality suppliers/vendors. The wholesale operations have a wider perspective to my experience because they tend to do more sourcing. More entrepreneurial.
Advance Shipment Notice
3 Ways Match
Payment to Supplier
Procurement is the complete process or a cradle to grave approach. It starts with the identification of a need and continues until either the need no longer exists (the need is not filled and goes away) or the need has been filled and the contract leading to the meeting of the need is closed. Purchasing is the actual process of contracting for meeting of the need.
Establishing Payment Terms
Selection and Negotiation of Contracts
Receipt and Inspection
Price & Terms
Invoice Approval & Payment
Source/ Examine Supplier Option
Release and receive purchase requirements.
Continuously measure and manage supplier performance.
Evaluate potential suppliers.
Identify or anticipate material or service needs.
5 Rights of Procurement