Most small business owners classify procurement and purchasing as the same thing. Although, the two terms are similar that have different meanings. Procurement is the overall arching umbrella that includes vendor selection, determining payment terms, strategic vetting, selection (RFP process), negotiation of the contract, and the actual purchasing of the goods or services.
Procurement includes several core business functions and should be considered a part of your overall corporate strategy. Company identity, market placement, company capabilities, and management oversight all have procurement intertwined . For instance, corporate policy should be developed and implemented to ensure your organization is sourcing products and services from companies that have similar ethics and integrity. If protecting the environment is important to your company, then an environmentally green policy should be developed and implemented to ensure you only source from companies that are environmentally conscious as well.
Getting your procurement functions in line with your corporate strategy is just one part of the procurement puzzle. Actually purchasing the goods and services that your organization needs is the other part of the procurement puzzle. The process of purchasing goods and services is known in the procurement world as the Procure-To-Pay-Cycle. The Procure-To-Pay-Cycle can be an intensive process with multiple steps.
Purchasing is simply a subset of the procurement process. Purchasing is generally the act of buying goods and services, receiving said goods and services, and ensuring payment is made for such goods and services. As you can see procurement is an extensive process that if utilized properly could help your organization cut costs and increase savings. Tucker Consulting & Training Services offers small business procurement training to assist small business owners with finding the perfect corporate strategy procurement mix to help your organization achieve your cost cutting goals.
Yolanda M. Tucker has over twenty years of corporate procurement experience. Yolanda holds two Master's degrees, one in Contracts & Acquisition Management from Strayer University. She holds an Administrative and Regulatory Law Certification from Florida Coastal School of Law. Yolanda is also a certified American Heart Association Instructor and a certified ALICE Active Shooter Instructor.