Understanding how procurement and supply chain management both function will help you build a resilient, sustainable organization that can stay unmoved and exceed your customers’ expectations always.
Have you ever wondered what the difference between procurement and supply chain management is? Even though above-mentioned concepts are related, there is a distinct difference between them.
Understanding the difference between the two ensures you’ll use the right term when you need it.
What is Procurement?
Merriam-Webster Dictionary defines procure as, “to get possession of something: to obtain something by particular care and effort.”
It’s simply the act of “obtaining or buying goods and services.”
What is Supply Chain?
Supply chain is the network of manufacturers, suppliers, logistics providers and other people involved in getting your product in the hands of a customer. Supply chain incorporates not only raw material gatherers, transportation companies and wholesale warehouses, but also tasks and functions that contribute to moving the product.
Supply chain, according to Tech Target, “is the broad range of activities required to plan, control, and execute a product’s flow, from acquiring raw materials and production through distribution to the final customer, in the most streamlined and cost-effective way possible.”
Supply chain is the infrastructure you need to obtain materials to be procured.
Below are some key differences
Procurement emphasizes on input; supply chain focuses on output and delivery
Procurement deals with acquiring supplies; supply chain encompasses all that and more
Procurement supports production; supply chain encompasses production and distribution
By highlighting these differences, you will get a better, more fulsome understanding of the complex procurement world. We sincerely hope that from now you will stop using terms interchangeably when you shouldn’t, especially when it comes to procurement and supply chain management.
What is procurement and supply chain management?
It’s the art of managing all the relevant factors to get your products into your end users’ hands as efficiently as possible.
Regardless of location or rank, our consultants are down to earth, approachable, and have a shared passion for doing innovative client work that provides clear benefits to the organizations we work with in both the short and long term.
If you’re looking for a better way to manage purchasing, procurement, and spending in your company, request a demo and see how Paragon can help.
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