What Is the Difference Between Project Procurement and Operational Procurement?

Procurement is the acquisition of goods and services that are vital to the core function of a business.  Procurement is an umbrella term that encompasses all the activities to do with organizational procurement of goods and services but can be broken down to more specific terms.

For example, purchasing is generally referred to as the actual process of buying goods and services.  Purchasing may also include the receiving of goods and fulfillment of payment, but doesn’t include the vetting of suppliers, strategic decision making, negotiation of payment terms, etc.

Project procurement deals with the acquisition of project specific goods and services. For example, a construction company will need specific materials, licenses and services to complete a housing project that would differ from a hi-rise development.  The purchasing of specific items or services that are needed for a particular project all fall under project procurement.

Operational procurement mostly encompasses administrative items.  These items are generally needed to sustain everyday business operations.  Examples would include paper, pens, coffee beans, toner cartridges etc.

While industry specific terms often amount to jargon, it is important to have an understanding of your organization’s procurement process.  Whether you call it purchasing, procurement, or something else entirely your procurement process can help your organization become more efficient and create real improvements to the bottom line.

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