In industry 4.0, procurement activity will be digitalized. Organisations must understand and adapt the changes. In the digital era, it is critical for organisations to adapt their procurement operation to Digital Procurement and ride on the rapid changes that are transforming industry.
Contrasting Terminologies of Procurement versus Purchasing
Purchasing has been described as the process of ordering and receiving goods and services. Procurement, however, has been described as those activities to acquire goods and services.
These terminologies of Procurement vs Purchasing can perhaps be best explained using the PP Organogram, as shown in the diagram below. This article will focus on the terminology of Procurement, instead of Purchasing.
Contrasting Processes of Conventional and Digital Procurement
The starting point is to study the process of a typical conventional procurement system, and compare this with that of the digital procurement evolution. We will also explore the key benefits of transiting from conventional to a digital procurement system.