Is purchasing a bad word?

Quick question; what is the difference between purchasing and procurement?

If you do a Google search, you will find that purchasing involves the process of ordering goods and services.

Conversely, procurement involves the sourcing, negotiation, and strategic selection of goods that are important to an organization.

Of course, additional searches reveal many variations of the above.

For example, and in one instance, there is a further splintering down of the procurement definition to include sourcing as a third position.

Then there is the old purchasing only focuses on short-term objectives, while procurement takes a long-term view beyond the immediate acquisition of said goods or services explanation.

If It Walks Like A Duck

Regardless of the various definitions, or the trendy passing terms of the day, the name we give to what we do all boils down to one thing; we facilitate the acquisition of goods or services to enable our organization to achieve its strategic objectives while maximizing value for all stakeholders.

In other words, let’s not get caught up in titles but instead focus on what we do from the standpoint of impacts and outcomes.

A Digital Wake-Up Call

Whenever an organization talks about digital transformation, the elephant in the room is the looming question; will people lose their job.

Let’s not beat around the bush; the answer is Y-E-S. There, the truth is out and in plain sight. With technological advancement, job loss is inevitable.

A McKinsey Global Institute study reports that 800 million jobs will be lost worldwide due to automation. The other side of that two-edged sword is that while there will be “job loss,” automation will also create new jobs and redefine “existing roles.”

So, instead of hiding from or ducking the hard truths about the digital era, we need to call it as it is and then plan for the pending change. After all, change is inevitable, and those who fail to adapt will be left behind.

In the supply chain world, think of it has “moving” from being tactical to strategic. Automation will eliminate tactical positions while creating more lucrative strategic roles.

What will the new “strategic” roles entail?

That Strategic Thing

Supply Chains have taken on a more strategic role within the global enterprise these past few years.

With emerging technology that is built for how the world should work versus improving the way it does work, supply chain professionals must demonstrate a wide range of competencies including;

1. risk assessment and management;
2. internal and external stakeholder relationship management;
3. an enterprise-wide understanding of both the individual and collective impact of potential obstacles relating to core objectives;
4. performance measurement beyond the familiar or traditional metrics of the past.

The above are just a few of the noteworthy changes that reflect a redefining of our old roles. If it is of any comfort, IT, finance, and other departments will go through similar “transformations.”

The fact that CMOs will spend more on IT than CIOs over the next few years give testimony to the breadth of change or redefining that is on the near horizon.

Coming back to the question; is purchasing a bad word. No, but like procurement and sourcing, it is no longer a relevant word.