Sourcing is the process of identifying, evaluating, selecting and establishing a relationship with suppliers or manufacturers who can provide the goods or raw materials needed for a business.
It is a critical step in the procurement cycle and significantly determines the quality, cost, and availability of the goods or services purchased. Frequently used interchangeably with “procurement,” sourcing is a distinct supply chain process within the procurement department.
Procurement is obtaining goods and services a business needs to carry out its operations.
Sourcing 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.
