Distinguishing Procurement from Supply Chain Management

Understanding the differences between procurement and supply chain management has significance for improving effectiveness and profitability. Even though these terms are commonly used synonymously, in the broader context of supply chain operations, they reflect distinct but related tasks.

Getting the right supplies in the proper quantity and quality at the most competitive rate within the allotted time is the main objective of procurement. This function focuses on managing supplier relationships and ensuring that the organisation's purchasing needs are met efficiently.

However, supply chain management includes a wider range of tasks that extend beyond purchasing. Planning, sourcing, creating, and delivering goods and services to clients are all included in this process.

Supply chain management aims to maximise product movement from the point of origin to the point of consumption, emphasising effectiveness, economy, and client happiness. Numerous tasks, including predicting demand, inventory control, distribution, logistics, and customer support, are integrated by this function.

 The primary distinction between supply chain management and procurement is their respective areas of emphasis and breadth. Purchasing and obtaining products and services are the main concerns of procurement, but supply chain management takes a more comprehensive approach to the whole product lifecycle, from locating raw materials to shipping the finished product to clients.

 


Procurement in Supply Chain Management

Academy of Procurement can further explain how procurement and supply chain management are correlated, and they focus on the need to differentiate procurement from supply chain management. Understanding these distinctions is essential for organisations to effectively optimise their procurement strategies within the context of comprehensive supply chain management practices.

Suggested Read:

https://academyofprocurement.blogspot.com/2024/05/understanding-procurement-management.html


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