Question

Sourcing selection strategy has a very important role in the supply chain and one of the most important point is Innovation orientation. Please write at least 3-5 paragraphs about Sourcing selection strategy and Innovation orientation, and how important is that for a business, and how it effect the business. Also, list some examples about some businesses.

Answer 1

Sourcing selection strategy plays a key role for organization success. They use various strategy to fulfil the need of organization.

Sourcing team analyse the outside market and find the appropriate place for raw materials, Machines and Finished product. Sourcing has different strategic plan based on organization type, Product and Service. Product industry need the raw materials for manufacturing its product. So Sourcing team find all possible resoucrces of raw material and final the deal with best price. On the other hand, Service industry has very limited resources. So sourcing team has to find the best option among all.

sourcing team is the one who finalize the supplier and fix a best deal for the organization. First they assess all the supplier information and based on this data they prepare a supplier evalution chart. They give the rating to supplier on the basis of quality, Delivery schedule and past experience with other industry. Organization always select multiple supplier to avoid the disruption in maufacturing and services.

On the basis of supplier evalution chart, organization demand for proposal and bid from all supplier. Sourcing team will evalute all the proposal on the basis of detail information, Bid and quotation. And they will finalize the 2 or 3 supplier. Now they will finalize 1 supplier according to best price and quality.

Sourcing is very important point from business point of view. They make the business process very efficient and works reducing the product or service cost. It has a major role in new product developement for material procurement.

Example

Suppose a mobile manufacturing company which produce 1000k mobile daily. They need the components supplier for their assembly. And they need some local supplier for packing material. They have also need for jig and fixture to make manufacturing process efficient and good quality product. And some additional consumable material required from local supplier.