If you’ve spent any time in supply chain management, especially in industries like mining, drilling, or manufacturing, you’ve probably heard the terms “procurement” and “purchasing” used interchangeably. On the surface, they might seem like the same thing—after all, both involve acquiring goods and services. But once you dig a little deeper, you’ll realize they serve different purposes, play distinct roles, and deliver unique value to an organization.
So, are procurement and purchasing really just two sides of the same coin? The answer is: yes… and no.
Let’s break it down.
The Similarity That Causes Confusion
It’s easy to see where the confusion starts. Both procurement and purchasing are about buying. Both require working with vendors, managing costs, and ensuring materials or services are delivered on time. But that’s about where the similarity ends.
Think of it this way: purchasing is a piece of the procurement puzzle. It’s the tactical action within a broader strategic framework.
What Exactly Is Purchasing?
Purchasing is the act of acquiring goods or services. It involves the day-to-day transactional tasks, such as:
- Creating purchase orders (POs)
- Processing payments
- Receiving goods and services
- Managing delivery schedules
- Keeping documentation in order
It’s reactive by nature. A need arises, and the purchasing team acts on it—often with an approved supplier, at a fixed price, and within an agreed timeline.
In mining operations, for example, if a drill bit breaks down in the field, purchasing gets the call. Their job? Source a replacement fast—ideally from a pre-approved vendor, with known specs and lead time. It’s fast, focused, and critical to daily operations.
Now Let’s Talk About Procurement
Procurement, on the other hand, is much broader and more strategic. It involves the entire process of identifying needs, evaluating suppliers, negotiating contracts, managing supplier relationships, and aligning purchases with business goals.
A procurement professional looks beyond the current transaction. They ask:
- Are we getting the best value for money?
- Can we optimize supplier performance?
- Is there a better source in terms of cost, quality, and sustainability?
- Are we mitigating supply chain risks in volatile markets?
Let’s bring this back to mining. While purchasing gets that broken drill bit replaced today, procurement is already analyzing supplier data, reviewing historical usage, considering consolidating orders, and even exploring alternative vendors who offer longer tool life or bundled service packages.
Procurement is proactive. It’s about shaping the future, not just solving today’s problems.
Why the Distinction Matters
Many companies make the mistake of treating procurement and purchasing as the same function—usually lumped under “Procurement Department” on the org chart. But by doing so, they risk underutilizing one of the most strategic tools in business.
In today’s complex supply chain landscape—where commodity prices fluctuate, geopolitical risks rise, and sustainability matters more than ever—procurement plays a pivotal role in keeping companies competitive, lean, and resilient.
Purchasing is essential, yes. But procurement drives the long-term value.
Different Skill Sets, Different Mindsets
Another way to understand the difference is by looking at the people behind the processes.
Purchasing professionals are often detail-oriented, efficient, and deadline-driven. They excel in systems like SAP, Oracle, or Pronto, and they’re laser-focused on accuracy—PO numbers, delivery dates, quantities, and invoices.
Procurement professionals, meanwhile, think more like business strategists. They need strong negotiation skills, market awareness, analytical thinking, and even a touch of diplomacy. They’re relationship-builders who can align supplier capabilities with company goals.
Both skill sets are crucial—but they’re not always interchangeable.
Can One Exist Without the Other?
Not really. In fact, the best supply chains integrate procurement and purchasing seamlessly. Procurement lays the groundwork—building relationships, setting strategies, and negotiating terms—while purchasing executes those strategies with precision and speed.
It’s like procurement draws the map, and purchasing drives the car.
The Bottom Line: Alignment Is Everything
In my 15+ years working across mining, industrial, and drilling operations, I’ve seen firsthand how companies that separate—but synchronize—procurement and purchasing outperform those that don’t.
When these two functions are aligned, procurement sets the vision and long-term goals, while purchasing keeps the engine running. Together, they ensure the business not only saves money but also stays competitive, resilient, and ready for what’s next.
So, are procurement and purchasing two sides of the same coin?
Yes—but only if you understand that one side is tactical, and the other is strategic. You need both to keep your supply chain strong, agile, and future-ready.
Need help optimizing your procurement function or bridging the gap between strategy and execution? Let’s connect. I’m always open to exchanging ideas, lessons learned, and practical solutions from the field.
That’s all from me. I hope you find this valuable and insightful!
“Transforming Supply Chains, Empowering People, Delivering Results – Eddy Suryadi”
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Originally posted 2025-05-12 12:56:32.