You probably heard about product sourcing, but maybe you don’t know exactly what it means. In this article, we are talking about what product sourcing is and how it can benefit your company.
If you are a part of a business, you are aware of the fact that any firm has different departments, such as Finance, Human Resources, Sales, Legal, IT or Accounting. Many companies have outsourced some of these departments, either to save money or to add more skilled professionals to their teams.
Recently, a new trend has appeared, a trend called product sourcing. Properly doing product sourcing, especially when we are talking about global product sourcing, is a quite difficult task. To properly fulfill it, you need a passionate specialist, that has the appropriate skills and knowledge, as well as a wide network of collaborating suppliers. Sourcing basically means searching and identifying the best sources of products and services that your company needs and negotiating a favorable contract with those sources.
Since sourcing is a rather new concept, many people don’t know the difference between sourcing and procurement. You might think that there are the same thing, but sourcing is only a part of the entire procurement process, which consists of a collection of processes, not only buying the needed product and services.
Why do so many businesses seek the services of sourcing companies? For the same to reasons we mentioned before to be responsible for the outsourcing of other company departments (HR, Finance, Accounting). The first reason that determines businesses to surrender the responsibility of sourcing to third parties is saving money. By cutting a whole sourcing department, you reduce the headcount of your business, thus paying less money for wages and related activities. However, most companies choose to get help with their sourcing due to the fact they realize which are their limitations. They come to realize that they do not have enough experience, knowledge and relationships in the industry to achieve the results they desire. By giving this tasks to a third party, they achieve a better understanding of the methods, steps and processes involved in sourcing. This way, no more mistakes are made, deadlines are respected and things run smoothly from one end to another.
Sourcing companies have something your company probably doesn’t have. In their years of experience in the field, they have built relationships, based on trust and mutual respect, with different suppliers all around the world. Even when looking for a new supplier, they will know which are the signals of a trustworthy supplier, as well as the price ranges and ascending or descending trends on the market.
If you have reached the conclusion that you need such a service, don’t hesitate to go online and do a simple search. You will find many companies that offer sourcing, procurement and logistics services, but to make sure that you choose the right one, check their credentials and find out how much experience they have in this field.