Procurement vs. Strategic Sourcing

When we talk about Procurement vs Strategic Sourcing, it’s essential to recognize that while they often go hand in hand, they actually serve different purposes in terms of scope and depth:

Procurement: It is the comprehensive process of acquiring goods and services for an organization. It encompasses everything from spotting a need, selecting suppliers, negotiating deals, managing purchase orders, overseeing contracts, handling vendor relationships, processing invoices, and making payments. Essentially, it’s all about managing the entire journey of getting what the company requires.

Strategic Sourcing: This is a specific part of the broader Procurement Process. It’s a methodical, data-driven approach to identifying and evaluating potential suppliers, ensuring that the organization obtains the best value and cost for a particular good or service. Strategic sourcing usually includes thorough spend analysis, market research, careful supplier evaluation, competitive bidding, and rigorous negotiation.