A well-developed sourcing strategy can make a massive difference in your bottom line.
To make things easier, this post will break down everything involved with sourcing – from finding products to finding the best people to buy those products from to the delivery types involved from sourced supplier to customer.
Creating a seamless pipeline to procure and bring these products to consumers will keep your sales process functioning efficiently.
Let’s dive right in!
What is Sourcing?
In inventory management, sourcing refers to identifying, evaluating, and establishing a relationship with suppliers or manufacturers who can provide the goods or raw materials needed for a business.
This includes determining the most cost-effective and reliable sources for these items, negotiating terms and prices, and managing the ordering and delivery process to ensure a consistent and efficient inventory flow to meet business demands.
What is procurement, and what does it have to do with sourcing?
Procurement is obtaining goods and services a business needs to carry out its operations.
It involves activities such as identifying needs, sourcing suppliers, negotiating prices, agreeing on contracts, and managing supplier relationships to ensure the timely delivery of quality goods and services.
On the other hand, sourcing is a component of the procurement process that specifically focuses on identifying suitable suppliers or vendors who can provide the necessary goods or services and establishing relationships with these suppliers.
Sourcing and procurement are closely interlinked and crucial to effective supply chain management.
Why Is Sourcing Important?
Supply chains would not exist without sourcing. How can you sell what you don’t have?
Aside from that obvious point, here are some reasons sourcing is essential.
Cost Management
Strategic sourcing provides benefits for both buyers and suppliers. Buyers can typically negotiate lower unit pricing for high-volume…
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