Are procurement, purchasing and outsourcing all the same?
One of the returning topics when I talk with people about ‘outsourcing’ is what the difference is with ‘purchasing’. The short answer is that the typical purchase officer a) focuses to much on $$$ and b) lacks the required knowledge and skills that sets outsourcing apart from buying pencils and the light bulbs.My search for a more comprehensive answer resulted at first in the following quotes: Procurement : ‘obtaining from external sources all goods, services, capabilities and knowledge necessary for running, the company’s primary and support activities (Weele, 1995) Outsourcing : ‘refers to the process whereby activities traditionally carried out inside the firm are contracted out to other organisations’ (Domberger, 1998). Sourcing : ‘finding sources of supply, guaranteeing continuity of supply, ensuring alternative sources of supply, and gathering knowledge of procurable resources’ (Vollman et al, 1984). I don’t know about you, but it did not help me all that much. It is still too mu...