Many people think that sourcing and procurement are synonymous, and both are meant for exporting supplies from an organization. Reality is far away from this notion. Both play some vital roles in supply chain management, but they are different. Therefore, sourcing and procurement must be employed in different ways. If you want to utilize them in the best possible way, you need to learn about their differences; it will allow you to employ the right procurement and sourcing services 

What is Sourcing? 

Sourcing is the method of assessing, choosing, and handling suppliers who are able to offer the inputs an organization needs for day-to-day activities. Sourcing engages research, development, and strategy execution, quality assurance, and nominating suppliers that can meet the organizational requirements without any difficulties. Through these activities, sourcing maintains the supply chain of an organization and ensures that the organization always gets access to the tools it requires to achieve its goals  

As implied by its name, sourcing is associated with developing sources through which an organization can flow its supplies.  

What is Procurement? 

Procurement is the method of obtaining goods and services an organization needs to continue its regular operations. It is mainly associated with procuring the supplies, which are essential for an organization to maintain the workflow of their day-to-day affairs. In this context, it is important to note that procurement solutions may be restricted to a list of approved suppliers, which may have already gone through the sourcing method.  

Sourcing vs Procurement Key Differences 

Sourcing and procurement have a bunch of similarities. But, if you want to develop a clear insight into each one, you need to learn about their key differences. Some of its key differences are: 

Range of activities 

Sourcing takes into consideration everything including finding, screening, and contracting the suppliers, and maintaining a healthy supplier chain to meet the organizational necessities.  

Procurement covers goods and service procuring to help an organization deal with its day-to-day affairs.  


Usually, sourcing services emphasize who can be able to make the supplies flawless. 

Procurement services focus on what should be supplied. 

Supply chain management 

Sourcing is associated with developing and handling supply chains. 

Procurement optimizes supply chains to make sure that the flow of the inputs and supplies to the organization is streamlined.  

Major areas  

Sourcing deals with supply chains and creates alternative options for resilience. 

Procurement deals with already existing supply chains and it does not attempt at creating a new supply chain.  

Bottom Line 

Moreover, the sourcing department deploys data produced by the procurement department to maintain the supplier relationships and figure out whether the organization should continue or terminate the partnership with its suppliers. It will depend on the performance of the suppliers over time. To sum up, it can be said that sourcing builds the framework, and procurement solutions work on this framework. Though the functions of sourcing and procurement are different, many organizations, small ones, in particular, merge the two due to the limitation of their funds and accommodations. They can be viewed as two separate departments having their unique goals, key performance indicators, and challenges. An organization needs to manage both departments carefully to ensure an overall hassle-free organizational framework. 

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