Sourcing is one of the most important mile stone in manufacturing a product or services. Sourcing could be a single type or a combination of various procurement techniques to get access to resources required for the final production of a product.  For any major product manufacturing many types of suppliers are required which provides various raw materials or services to the manufacturer who in turn will do various process to modify those raw materials and convert them into finished goods.  While sourcing a product the quality of resources, process standardization and system of supplier etc are evaluated on many scales before reaching a final conclusion for total sourcing and procurement system.

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Sourcing can be classified into many categories like global sourcing’ domestic sourcing’ strategic sourcing and co sourcing.  Each type of sourcing is different and used at a different time depending on the need of manufacturer. Global sourcing can be defined as that type of sourcing when procurement of a raw material or services is done from across the globe or from multiple countries that are able to provide the resources at a cost effective manner or in bulk quantities. One of the best examples of global sourcing is corporations from all over the globe are sourcing there IT solutions from countries like India’ China and Philippines etc.

Domestic sourcing is when a resource is procured from within the country borders. This type of sourcing is done when the resources are available easily and in a cost effective way in local surroundings. It is also done when the time period for delivery is very less ad resource is critical for the company.

Strategic sourcing is that type of sourcing which provides a strategic advantage to a company over its competitors both in short term as well as long terms. A company tries to gain access to some resources in a contractual way if they are able to identify the resource and gain total control over it or in other case being able to source some raw material at a lower price than market prevailing rates and in turn makes their own product much more cost effective or increase their profit margins. This type of sourcing is help full to company in achieving its strategic objectives.

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