What’s the Difference Between Procurement and Purchasing?

Commercial fabric acquisition recreation of the 1950’s and earlier years with its center around ” three bids and the lowest price” was referred to as Purchasing. Later this function developed into “Procurement Service” in defense and public sector in the 1960’s. World class industrial companies followed the term in early 1970’s with organizational center around “total cost of possession” TCO, protecting several activities from demand determination to dealer alternative and negotiation of contracts to ensure uninterrupted supply line. Some point in time, “procurement” will be absorbed into the umbrella function of “supply chain management”.

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