Both procurement and supply chain management focus on how a company handles various goods. Each team has different responsibilities in the overall process of managing goods and services.
To understand the differences between procurement vs supply chain management, you need to see how each area works with various goods and services. When you know how both procurement and supply chain management work, you can find ways to help the two teams — and the rest of the company — work better together.
Understanding procurement vs supply chain management
While procurement and supply chain management both have to do with goods and services, they focus on different areas.
The goal of procurement is to secure the goods and services the business needs to meet its goals. Procurement teams focus on:
- Creating quality standards to assess goods and services before making purchasing decisions
- Ensuring that purchases comply with company ethics and standards
- Negotiating prices and terms in order to complete purchases
- Controlling inventory
- Disposing of waste materials, like product packaging
“The procurement function stops once your company has possession of the goods,” writes business solutions consultant Matt Sabell. Once the goods have arrived, other departments take over with their own respective processes for managing those goods, such as preparing them for sale.
Supply chain management takes a broader view than procurement. In fact, supply chain management oversees and manages the entire supply chain, including procurement. Procurement gets items in the door; supply chain management provides the infrastructure for procurement to do that job and for every other department to do its job with the items once they arrive.
Because a procurement team focuses on one specific process and a supply chain management team deals with supporting a set of related processes, it’s easy for each of them to lose sight of how their work affects the other. When procurement and supply chain management work closely together, they can find ways to streamline their approach, saving money and time. Technology offers one way to turn the procurement vs supply chain management relationship into a partnership.
Using forms to improve procurement and supply chain management
Getting a solid grasp of procurement vs supply chain management often means focusing on the differences between the two processes. Yet procurement and supply chain management also share common features. For example, companies can improve both processes by using online forms to gather and track data.
Jotform’s online form templates are easy-to-use tools that can benefit both procurement teams and supply chain managers. These templates allow procurement and supply chain management teams to
- Automate data collection, making it easier to manage suppliers and shipments
- Streamline supplier and vendor onboarding and contact information
- Track inventory, including quantities and locations
- Collect purchase requests and submit requests for pricing
- Create and manage purchase orders
- Create, edit, sign, and manage contracts, agreements, and terms and conditions
- Manage receiving, inspections, payments, and receipts
Technology offers a way to improve communication between procurement and supply chain management teams, writes Jonathan Webb, head of advisory at Procurement Leaders, a procurement network and intelligence platform. Using common technology like shared online forms allows procurement teams to share information with supply chain management leaders and the entire organization more easily.
For example, the entire supply chain benefits from everyone being able to see at a glance which purchases the procurement team has made and whether goods have arrived. Teams don’t have to wonder when their needed supplies or raw materials will show up or wait for procurement to alert them.
Meanwhile, procurement teams can focus on their own tasks, confident that they have the information they need to make the best purchasing arrangements for the company. Supply chain managers can assess the work of procurement within the context of the entire supply chain to improve performance.
Ultimately, it’s not about procurement vs supply chain management — it’s about getting the two areas to work together seamlessly. Companies that put technology to work for both procurement and supply chain management see several benefits, including more resilience in the supply chain, better risk management, and more opportunities for innovation. Tools like Jotform’s online templates can help the two teams tackle their work more effectively.
Photo by Tiger Lily
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