Procurement

Procurement is the process of obtaining goods and services a business needs. It can include defining requirements, selecting suppliers, negotiating terms and managing contracts, while purchasing more narrowly refers to placing and administering orders.

Procurement can begin before a supplier is contacted, with work to define specifications, budgets and internal approvals. It continues through sourcing, contracts and supplier performance management. The scope varies by business, but the central purpose is to obtain suitable goods or services on terms that support the organisation's needs.

For example, procuring warehouse equipment may involve assessing requirements, comparing suppliers, negotiating maintenance support and managing acceptance. Purchasing covers the order and transaction administration within that process. Strategic sourcing gives procurement a longer-term framework for supplier selection where repeated spend or supply risk justifies it.