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Discussion – 


Is Strategic Sourcing The Same As Procurement

Is Strategic Sourcing The Same As Procurement

Strategic sourcing and procurement are often used interchangeably, but they’re not the same. Many organizations use these terms in different ways, which can lead to confusion about what each term means.

In this article, we’ll take a look at whether strategic sourcing and procurement are the same or if there’s a difference between them. We’ll explore how businesses use each other and discuss why it matters for companies to understand their differences.

Keep reading to learn more!


Exploring Definitions

Procurement and strategic sourcing are two terms related to the supply chain process that may seem interchangeable but have distinct differences.

Procurement is the overall purchasing activities of a company including identifying suppliers, negotiating prices and managing supplier relationships. This includes both goods and services that a business needs to operate efficiently and effectively.

Strategic sourcing goes beyond procurement by considering the total cost of ownership for materials or services when deciding what products to purchase. It involves analyzing all aspects of the product’s lifecycle costs and market conditions before making any decisions.

The benefits of strategic sourcing include better pricing leverage due to an increased understanding of how different markets affect price points, improved quality control measures due to greater knowledge of global production capabilities and resources, and reduced long-term risk associated with volatile market forces such as currency fluctuations or sudden shifts in demand.

By utilizing this approach, businesses can stabilize their supply chains while lowering costs at the same time. Ultimately it provides organizations with more options when selecting products or services, which helps them stay competitive in today’s ever-changing marketplace.

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Examining The Relationship Between Procurement And Sourcing

Having explored the definitions of strategic sourcing and procurement, it’s time to examine their relationship.

Strategic sourcing is a subset of procurement but is not the same concept. Procurement usually encompasses a broader scope that includes both purchasing and sourcing activities.

While all strategic sourcing efforts fall under the procurement umbrella, not all initiatives involve strategic sourcing.

When it comes to supply chain management, understanding the differences between these two concepts is essential for successful operations. Sourcing processes often require specialized knowledge to identify suppliers who can meet specific requirements at competitive prices; as such, organizations typically have dedicated personnel responsible for managing this process.

These professionals within a procurement department may be called “purchasing managers” or “procurement specialists” depending on how their job titles are structured within an organization’s hierarchy. By contrast, procurement teams generally focus more broadly on tasks like budgeting, vendor negotiation, and contract management – although some overlap with certain aspects of strategic sourcing does exist.

In summary, it’s important to recognize distinct differences between strategic sourcing and traditional procurement practices – even though they’re closely related components of any efficient supply chain strategy. Although many companies employ individuals whose sole responsibility is overseeing the sourcing process, most major corporations have separate departments devoted exclusively to managing the larger needs of corporate buying and contracting initiatives.


Comparing And Contrasting Terminology

To put it bluntly, strategic sourcing and procurement are two sides of the same coin. While they both serve to bring goods and services into an organization through a rigorous process, there is a distinct difference between them that should not be overlooked.

The procurement process entails purchasing from existing suppliers with whom the company has already established relationships. On the other hand, strategic sourcing focuses on developing long-term strategies for procuring items or services to get maximum value out of each purchase while adhering to set budgets. What’s more, what sets strategic sourcing apart is its ability to identify potential new sources and negotiate better deals by leveraging competition among vendors.

In essence, both processes strive to provide organizations with quality products and services at competitive prices without sacrificing quality; however, where one ends, the other begins. Whereas procurement helps companies obtain items quickly and cost-effectively, strategic sourcing helps ensure those purchases are sustainable over time.

In short, understanding the differences between these two terms can help organizations create optimal supply chains that maximize efficiency and save costs in the long run.


Assessing The Differences Between Procurement And Sourcing

Procurement and sourcing are often used interchangeably, but they have distinct differences.

Procurement is a process that involves the acquisition of goods or services from an outside supplier at the best possible cost while considering quality and delivery. It is part of a more extensive procurement system, including strategic sourcing, contract negotiation, and traditional sourcing activities.

On the other hand, sourcing refers to identifying potential suppliers for goods or services needed by an organization. A sourcing team typically plays a key role here as they search for new potential suppliers and help communicate with them during negotiations before finalizing contracts with those who offer suitable terms.

The main difference between procurement and strategic sourcing lies in their goals; While procurement aims to obtain goods/services based on certain criteria at a lower price than initially planned, strategic sourcing focuses more closely on achieving greater value through building solid relationships with reliable suppliers over time. It also requires a deeper understanding of market conditions, such as pricing trends and vendor capabilities, so organizations can make informed decisions about their supply chain.

Ultimately, both processes are essential to ensure efficient operations within any company. 



Strategic sourcing and procurement are two distinct processes. While both involve acquiring goods or services, the methods differ greatly.

Procurement involves more than simply sourcing supplies; it involves careful research and negotiations to ensure you get the best price for quality products.

So if you’re considering which approach to use, remember: strategic sourcing might seem like a no-brainer at first, but when it comes to getting what you need at the correct cost and within your timeline, you can’t beat procuring those items!

With these differing approaches in mind, we can all agree that there’s only one way to go: choose wisely!


Thanvir has 20 years of experience with some of the largest energy and financial information providers. Founder and CEO of Phycomex, where he is trusted by commodity traders, financiers, consumers, and refiners to help optimise procurement.


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