Procurement - noun

(pro·cure·ment)

1: the act of procuring

2: the purchasing, leasing, renting, or selling of materials, services, equipment, or construction

“Procurement.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/procurement. Accessed 29 Mar. 2023.

procurement

vs

Purchasing

Procurement

Purchasing

Direct vs Indirect

Direct procurement refers to acquiring something needed to produce an end product. This could be raw materials, components or a product or services that is resold to a customer. Anything related to the cost of goods sold.
Indirect procurement refers to purchases of product and services that are needed for day-to-day operations but don’t directly contribute to the company’s revenue. This can include things like Laptops, Software, office supplies, consulting services and maintenance.
Services procurement used for both direct and indirect procurement. Examples include contingent Labor, Consulting services, individual contractors and managed services.

Step 1

Identify Need

Step 2

Create Request

Step 3

Vendor Evaluation & Selection

Step 4

Negotiate

Price & Term

Step 5

Create

Purchase Order

Impacts Your Bottomline: Effective procurement structure and strategies result in cost controls, savings and ultimately increased profitability.
Cross Functional Visibility: Procurement is a shared services organization that helps connect the dots.
Organizational Success: Acquiring the product and services in a timely manner so that ongoing projects are successfully completed.
Improved Budgeting: Strategic procurement practices include third party spend category planning. Forecasting results in improved budgeting