Difference Between Sourcing and Procurement

by | Jun 17, 2022 | Blog


What is procurement?

Procurement is the process of acquiring the goods and services for an organization. The purchasing process usually starts only after the buyer has identified or defined the commercial aspect requirements. It will end with upon the receipt of the good or services through the payment of invoices. 


What is sourcing?

Sourcing is the process of vetting, selecting, and managing a group of supply chain suppliers who can provide both technical knowledge and commcercial aspects to an organization to keep the operating running. Sourcing is also tasked with carrying out research, creating and executing strategy, defining quality and quantity metrics that are able to meet these criteria.

Sourcing help to maintain the organization’s supply chain and guarantees that the organization always has access to the required items  or components to deliver in order to meet the operation objectives. It also involved building up rapport from suppliers for supports.

At the end of the sourcing process, usually a contract is signed or an agreement is reached between the buyer and the supplier on what is to be procured and the terms of contract subjected to total value of the prochure. Sourcing professionals will evaluate the supply market, develop and execute strategy, negotiate terms of contract and finally develop the contractual agreement with the suppliers


What are the core differences between procurement and sourcing?

Procurement and sourcing having many similarities. The table below defines the core differences between sourcing vs procurement.

Sourcing are finding of reliable suppliers, vetting and contracting with them. Buyer has also maintained a healthy chain of suppliers to meet the organization requirements. Procurement involves purchasing the intended items or services required by the organization.
Sourcing focus on the suppliers whom can makes the supplies possible.Procurement focus on what are the supplies.
Sourcing work on building and managing supply chains of suppliers.Procurement depending on the supply chains to ensure a steady flow of supplies that are required by the organization.
Sourcing manages supply chains and builds alternatives suppliers for back up.Procurement primary concerned with running created supply chains.
Sourcing has to maintain a good relationship of the suppliers.Procurement has to keep a good relationship with the organisation relevant departments



Procurement leverage from the foundation of the sourcing team that has built on to receive requisitions within the organization. Procurment will then order goods, track suppliers dleivery items or services, record quality and quantity metrics, feedback to the sourcing team for the performance of the suppliers, etc.

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