Sourcing

In procurement, sourcing refers to the strategic process of finding, evaluating, and selecting suppliers of goods and services to meet an organization’s operational needs. It involves identifying the best sources—whether local or global—that can provide quality, cost-effective, and reliable inputs or services.

Key Aspects of Sourcing:

• Supplier Identification: Finding potential vendors.
• Supplier Evaluation: Assessing capabilities, quality, reliability, compliance, and financial stability.
• Negotiation: Establishing pricing, terms, and conditions.
• Contracting: Finalizing agreements for supply or service.
• Relationship Management: Ongoing performance monitoring and collaboration.

Types of Sourcing:

• Single Sourcing: Choosing one supplier for a specific item.
• Multiple Sourcing: Using several suppliers to reduce risk.
• Global Sourcing: Procuring from international markets to leverage cost or quality advantages.
• Strategic Sourcing: A data-driven, long-term approach to optimize the supply base and value delivery.

Goal of Sourcing:

To secure the right product or service, at the right price, from the right source, at the right time, with the right quality.