Running head: PURCHASING AND PROCUREMENT 1
Purchasing and Procurement
Latasha Bryant
Liberty University
PURCHASING AND PROCUREMENT 2
Key concept explanation
Purchasing and procurement are terms used in business operations, where one is a strategic
process while the other is a function of transaction when one wishes to source and acquire goods
and services. Lonsdale et al. (2017) states that the focus of procurement is on the sourcing of
products and services strategically such as researching, negotiating and planning. Purchasing
process on the other hand entails the acquisition and ordering of products and services. For
instance, making purchase orders and arranging for payment is a purchasing process. A typical
procurement process entails a series of steps that include identification of need and requirements,
identifying local, national and global suppliers, terms, contracts and condition negotiation
between the supplier and the potential buyer, fostering relationships with suppliers and
performing an analysis based on cost savings and profit margins. The purchasing process is
different from procurement because it focuses on the transactional phase where goods and
services are bought. A typical purchasing process incorporates the aspects of reception of
purchase requirements, evaluation of quotes from suppliers, raising and processing purchase
orders, reception of commodities and warehouse management and finally organizing for payment
with the supplier. Purchasing and procurement is my topic of interest because I want to advance
my knowledge on issues pertaining to the procurement department. Later, I can use the
knowledge acquired to secure a position in the procurement department where I can effectively
implement the strategic process of procurement as well as the transactional activities through
purchasing of goods and services.
Comparison
In terms of comparison with the week’s module, I have learnt that projects that are focused on
client profitability account for approximately $554 billion each year on services related to
PURCHASING AND PROCUREMENT 3
management consultancy. Therefore, organizations should enhance effective management of the
purchasing process especially in the wider economy. Just like content acquired in class, I have
understood better the concept of procurement as a strategic process or product or service
sourcing. A successful procurement process requires members of the procurement department to
identify the requirements of a particular product or service as well as analysis of steps on how
organizations can locate new suppliers and foster healthy relationships with the supplier
(Soleimani et al, 2018). The main focus of procurement is on minimizing risks in business
operations together with facilitating value addition and return on investment. Through my
research, I also learnt that the process of purchasing is a sub-process of procurements where the
major focus is on acquisition of goods and services. Businesses should therefore identify experts
to handle the purchasing process to attain short term goals that include and are not limited to
quantity, costs and timing (O’Brien, 2019). Besides, many businesses use the procurement
software to store and manage critical information that is necessary to maintain supplier
management. This software aids professionals in the purchasing and procurement departments to
streamline the processes by minimizing data errors and improve the process of approval
workflow.
Article summary
This section highlights a summary of the article “efficient and adaptive procurement protocol
with purchasing privacy by Jiang et al. (2018). The authors define a procurement protocol as a
protocol that buyers use to buy digital goods at their appropriate prices from a supplier.
Businesses ensure the privacy of the procurement protocol is maintained through the priced
oblivious transfer that allows the purchase of products on a step by step basis. Procurement
protocols play a significant role in ensuring that organizations who purchase legal goods and
PURCHASING AND PROCUREMENT 4
services have the peace of mind as they use law firms who share commitment to diversity and
inclusion. This is because a single buyer is restricted to a seller who is required to encrypt all
products for each buyer when the setting involves more than one buyer. The article discusses an
adaptive price oblivious transfer that provides an opportunity for vendors to encrypt all items
without requiring the buyer to provide public keys. Hence, the approach can be utilized for
universal buyers when they want to strategically source products and services. Besides, the
protocol is most cost-efficient and its efficiency is demonstrated in terms of bandwidth as well as
the cost of computation when compared to the existing schemes (Jiang et al., 2018).
Biblical integration
In the bible, the concepts of procurement and purchasing have been integrated in various bible
verses. Therefore, organizations that embrace Christianity can use the bible verses to guide them
in conducting their operations during the processes of procurement and purchasing. For instance,
in Genesis chapter 47 verse 20, the bible says that “So Joseph bought all the land of Egypt for
pharaoh, for every Egyptian sold his field, because the famine was severe upon them. Thus, the
land became pharaohs. This verse illustrates the concept of purchasing where the product
involved was land. In Christian context, procurement protocols involve purchasing goods in
relation to legal laws, therefore Christian companies can use the bible while sourcing and
purchasing products to make an oath.
Application
In the business world, procurement and purchasing are terms that have been used
interchangeably in the procurement department to source and acquire products and services.
Organizations shape their procurement processes based on factors such as the size of the
company, available human resources and organizational structure. Companies utilize the
PURCHASING AND PROCUREMENT 5
procurement process to acquire the right goods and services until they maintain the right records
for sourcing goods and services. Implementation of effective procurement measures ensures that
contemporary businesses acquire goods and services and conduct its operations at the best prices.
The concepts of procurement and purchasing support each other in today’s organizations as they
aid a company make the right decisions regarding identification and acquisition of goods and
services (Govindaswamy et al., 2016).
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References
Govindaswamy, M., Kapila, S. and Hall, J.M., Amazon Technologies Inc, (2016). Universal
business procurement. U.S. Patent Application 14/612,457. Retrieved from
https://patents.google.com/patent/US20160225065A1/en. This article illustrates the guidelines
that must be adhered to during the processes of requisition of purchase orders.
Jiang, P., Guo, F., Susilo, W., Au, M. H., Huang, X., & Liu, J. K. (2018). Efficient and Adaptive
Procurement Protocol with Purchasing Privacy. IEEE Transactions on Services Computing.
Retrieved from https://ieeexplore.ieee.org/abstract/document/8325521. This book highlights the
relevance of a procurement protocol in helping buyers to purchase digital goods from a supplier.
Jiang and other authors state that procurement protocols aid in maintaining the privacy of buyers,
and goes further to prescribe the most effective POT that facilitates cost effectiveness during the
processes of procurement and purchase.
Lonsdale, C., Hoque, K., Kirkpatrick, I., & Sanderson, J. (2017). Knowing the price of
everything? Exploring the impact of increased procurement professional involvement on
management consultancy purchasing. Industrial Marketing Management, 65, 157-167. Retrieved
from https://www.sciencedirect.com/science/article/abs/pii/S0019850117303218. Here, the
authors discuss how involvement of procurement professionals has increased in the
contemporary world in the management consultancy purchasing. The authors integrate research
findings into their report to discuss the aspects of procurement and purchasing.
O'brien, J. (2019). Category management in purchasing: a strategic approach to maximize
business profitability. Kogan Page Publishers.
SOLEIMANI, S. M., MAKUI, A., & Bolandifar, E. (2018). Component Procurement Strategy in
TRIAD Competitive Supply Chains. Retrieved from
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https://www.sid.ir/en/journal/ViewPaper.aspx?ID=699509. Soleimani et al. describe how
intermediary enterprises are prevalent in the modern complex supply chain. therefore, firms
confer their purchasing and procurement processes to intermediary organizations like contract
manufacturers because of their significant impacts in the chain of supply. The author explains the
relevance of intermediaries in the supply chain to control components of procurement and
purchase.
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