The Difference Between Procurement and Supply Chain Management (2024)

Supply chain management is about optimizing your supply chain so it runs as smoothly as possible, eliminating friction, and ensuring the entire process of producing goods or services, all the way to delivering them to the end-users functions seamlessly.

Differences between procurement and supply chain management

To recap, procurement is the process of acquiring the supplies you need to run your business operations.

On the other hand, supply chain management encompasses how those supplies are transformed into finished products and delivered to the end-users.

Here are some of their key differences.

Procurement emphasizes on input; supply chain management focuses on output and delivery

While procurement has an input focus, supply chain management is more output-oriented and deals with what it takes to get your products and services into the hands of your customers as efficiently as possible.

Procurement deals with acquiring supplies; supply chain management encompasses all that and more

Procurement can be seen as a microcosm within the wider macrocosm, supply chain management.

While procurement only emphasizes building supplier relationshipsand managing them to ensure they can be leveraged to deliver the supplies your organization needs to function, supply chain management includes all that into its big bracket.

As it stands, procurement exists as a branch of supply chain management since it assists in getting the inputs that get processed into finished products.

Procurement supports production; supply chain management encompasses production and distribution

Procurement exists as a very significant support function within the business management equation as it’s essentially only concerned with ensuring the constant flow of the supplies an organization needs to process into finished products.

Supply chain management, on the other hand, is the main function that is supported by procurement.

In essence, supply chain management deals with how supplies are transformed into finished goods and distributed to the customers.

Supply chain management is all-encompassing, while procurement exists to support it with the input it needs to work.

Similarities between procurement and supply chain management

Judging by the insights we explored already, we can understand three key factors:

• Procurement supports your business functions by offering the inputs you need to run day-to-day operations
• Supply chain management deals with how those inputs are transformed into finished goods and delivered to your customers
• Procurement exists as a branch within supply chain management—it all boils down to getting goods to buyers

Despite their differences, both procurement and supply chain management are quite similar in many ways.

Here’s a breakdown of the similarities between procurement and supply chain management.

• Both procurement and supply chain management assist in delivering your business goals and targets
• Supply chain management and procurement are both internal operations; they may require input from external stakeholders but their core still remains within your organization
• Procurement and supply chain management has to be managed proactively in order to support your business operations

In conclusion, if you’re ever going to make sense of both your procurement and supply chain management, you need a tool designed for just that.

More specifically, you need a tool that’s built with an understanding of the differences between procurement and supply chain management.

That’s the only way you’ll be able to manage both optimally without lapses.

Using Kissflow Procurement Cloud, you can:

• Source, onboard, and engage suppliers from a huge pool
• Simplify purchasing with product catalogs
• Manage your internal production process with our project management tools
• Manage suppliers, distributors, and logistics from a single tool,
• Support countless supplier payment options, and finally,
• Bring all your procurement into one source of truth.

Kissflow Procurement Softwareis designed for businesses of all sizes looking to untangle procurement and manage the numbers and files with clarity.

Recommended Reading:

• Direct vs. Indirect Procurement: What’s the Difference?
• What’s the Difference Between Sourcing and Procurement?
• Procurement vs Purchasing: What’s The Difference?
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• Procurement Management System
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