How sourcing or strategic sourcing is different from procurement and purchasing?

1. How sourcing or strategic sourcing is different from procurement and purchasing? The process of the Supply Chain Management System works everywhere. The difference in types of enterprises differs as per the nature of their purchasing. This traditional activity has significantly evolved from purchasing to procurement to strategic sourcing and Supply Chain Management. Change is necessary to survive in the market for every company today. Earlier, strategic sourcing was not considered as the value-generating act. It is not similar to traditional purchasing. However, the concerned value can only be understood with respect to how it differs qualitatively from purchasing on areas like cost, value, relationships, and quality versus quantity paradox and collaboration. Traditional sourcing plays an important role in finding the lowest cost suppliers, strategic sourcing by qualitatively outweighs the profits through its aim of building longer-term relationships with suppliers. It will help them to collaborate and meet market dynamics. Relationship with Supply Chain Management The basic relationship between both the aspects says that the procurement process helps the users to get the goods required by the corporation's needs, while supply chain management helps in the supervision of the infrastructure and services needed to get those goods and services. In other words, a supply chain consists of everyone involved in getting a product and service in the hands of a customer, either internal or external. Key differences 1. Cost– This is an important factor, as most of the Buying agency in Gurgaon considers only the price value during their purchase. However, strategic sourcing aims towards the total cost of doing business with a supplier. By understanding the market dynamics, the strategic source managers look beyond price, to include delivery, purchasing administration, and inventory. 2. Value– Companies use a Supply chain management system for strategic sourcing to obtain additional value from suppliers. Suppliers that offer technologies or materials enable them to improve their own products or develop new products that add value to the relationship. Also, it helps a company to increase its competitive advantage.

2. 3. Quality Quantity Paradox– Purchasing mainly deals with generating high volumes for mass discounts. However, integrating their own quality standards with suppliers influences strategic sourcing to reduce its own costs. Obtaining different components and materials to a quality standard defines fewer inspections and less waste on the production line. 4. Relationship Building– While purchasing the lower headline price, one has to deal with multiple newer suppliers with each procurement season. Strategic sourcing invests in selected suppliers with long terms goals. Also, this relationship with its simpler ordering and invoicing arrangements will reduce the cost in the long run for different enterprises. Additionally, low priority price- oriented relationships will not help the Buying agency in Gurgaon to see the light of the day again. 5. Collaboration– In a traditional procurement environment, customers must cancel orders or find new suppliers with additional capacity. This helps them to meet changes in market demand. Also, strategic sourcing helps to build collaborative relationships between suppliers and customers. While providing information to the suppliers on future production plans and supply requirements, it is important for them to plan and adjust their own levels of productivity and allow both parties to respond quickly to market dynamism. Visit: strategic-sourcing-is-different-from-procurement-and-purchasing/ https://2asourcing.wordpress.com/2020/08/28/how-sourcing-or-