Final answer:
Strategic procurement involves long-term planning and decision-making, while operational procurement focuses on day-to-day activities. A manufacturing company may strategically analyze suppliers and negotiate contracts, while operationally placing regular orders and monitoring deliveries.
Step-by-step explanation:
Strategic procurement and operational procurement are two different approaches to managing the procurement function in an organization.
Strategic procurement refers to the long-term planning and decision-making process involved in acquiring goods and services. It focuses on developing sourcing strategies, evaluating suppliers, negotiating contracts, and managing supplier relationships. Strategic procurement aims to optimize the overall supply chain and maximize value for the organization.
Operational procurement is concerned with the day-to-day execution of the procurement activities. It involves activities such as purchasing goods and services, managing purchase orders, and ensuring timely delivery. Operational procurement focuses on efficiency, cost-effectiveness, and meeting immediate needs.
For example, let's consider a manufacturing company. In strategic procurement, the company may conduct a thorough analysis of suppliers to identify the most reliable and cost-effective options for raw material procurement. They may negotiate long-term contracts with chosen suppliers to ensure a stable supply chain. On the other hand, in operational procurement, the company's purchasing department may place regular orders for raw materials based on production demand and monitor the delivery schedules to ensure that production is not disrupted.