Terminology in Purchasing

One thing that you may have noticed about the purchasing field is that there are many words describing the same thing. The function and profession alone are referred to as purchasing, procurement, and supply management, just to name a few. These terms are essentially interchangeable.

One term that is often used to describe purchasing but technically has a much broader meaning is "supply chain management." Though many different and conflicting definitions of supply chain management abound, The definition, purchasing is a component of supply chain management. Purchasing deals primarily with managing all aspects related to the inputs to an organization (i.e., purchased goods, materials, and services), while supply chain management deals with inputs, conversion, and outputs.

A supply chain consists of three types of entities: customers, a producer, and the producer's suppliers. The extended supply chain includes customers' customers and suppliers' suppliers. Supply chain management oversees and optimizes the processes of acquiring inputs from suppliers (purchasing), converting those inputs into a finished product (production), and delivering those products – or outputs – to customers (fulfillment).

Nader Galal

 

Mohamed Hamdy

COO | Director of Operations | Supply Chain VP

9 年

Interesting post Nader , i would add to them the difference between Procurement and Purchasing , being used quite often interchangeably , while the are quite different in reality : this blog summarize it quite well https://blog.procurify.com/2014/02/07/what-is-the-difference-between-procurement-and-purchasing/

Eman Bassiouny Rohayem BEng(Elec), PhD, PMP

Management consulting I Strategist I Project, Engineering, risk and Quality management Consultant I Digital transformation I Climate change activist I Welcoming always new opportunities and new customers

9 年

Well done Nader !

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Saleh Al-Ghamdi

Sourcing Leader Schlumberger

9 年

I would like to take this opportunity to thank you Nader Nader Galal for sharing always wise and experience direct to the point information that lightning us.

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