Sourcing vs. Procurement: what’s the difference?

What does Sourcing mean?

Sourcing consists of identifying and assessing potential suppliers and selecting and managing suppliers to ensure the best value for your company.

You must first identify and evaluate your suppliers before you can purchase products from them.

If your sourcing strategy is effective, you may be able to find reliable, fairly priced, and high-quality suppliers to provide the products you need.

This could also entail checking to see if your business policies—like your ESG (environmental, social, and governance) procurement strategy—are being followed. Here, due diligence streamlines and improves the effectiveness of the entire procurement process.

How does the sourcing process take place?

The process of sourcing involves: 

• Getting quotations
• Gathering vendor data
• Figuring out lead times
• Establishing contracts
• Pricing
• Establishing minimum order quantities and other tasks. 

Except for revising pricing information, each supplier only needs to complete this step once.

Because it's crucial to have backup suppliers in case one falters, sourcing teams, are constantly engaged.

You must evaluate your purchase requirements during sourcing, create a plan, do market research, and find viable suppliers. After that, you'll assess the suppliers and select the best one for your requirements.

Once you have providers for all of your needs, repeat the process for all other purchasing requirements.

What does Procurement mean?

Procurement is the process of acquiring the materials you need from suppliers for your products and services.

Orders are placed with vendors, items are delivered, and purchases are made by procurement departments.

Planning, price negotiations, buy requisitions, purchase orders, and inventory monitoring are all included in the procurement process, which is an all-inclusive procedure.

How does it work?

The supply chain process begins with procurement because once the components required for production are ready, you can start creating the goods you sell to other people.

There's always a possibility that operations could stall without a sound procurement strategy.

You must halt the manufacture of a product if you cannot obtain the raw ingredients required to create it until a workable substitute is created.

Although enterprises, governmental entities, and nonprofits are frequently linked to procurement, it can also be used by private individuals making smaller purchases.

Key differences between Sourcing and Procurement

Surely Sourcing and Procurement hold many similarities, but we are here to look into what makes them different. Here are the key differences between Sourcing and Procurement.

Responsibility 

Objectives

Process

Main focus

Timing

You need a sourcing agent if: You want expertise and knowledge, access to a large supplier network, cost savings, time efficiency, and risk mitigation.

You need a procurement agent if: You want Supplier management, risk management and sustainable profitability, process efficiency, compliance, and regulatory requirements. Basically, Procurement would be a much more efficient process if you need to have a complete service.

How can DocShipper help you with your sourcing and procurement needs?

Sourcing assistance

Here at DocShipper, we help clients identify and source products from reliable suppliers around the world. We have a vast network of suppliers and can assist in finding the right suppliers based on your specific requirements. 

DocShipper also conducts thorough evaluations of potential suppliers to ensure their reliability, capability, and compliance with international standards. We help clients select the most suitable suppliers based on factors such as product quality, price, production capacity, and social responsibility.

Procurement management 

After providing Sourcing services, DocShipper assists clients in managing the procurement process, including negotiating with suppliers, reviewing contracts, and ensuring the timely delivery of goods. We handle all the necessary documentation and ensure compliance with import/export regulations.

At DocShipper, we act as a bridge between clients and suppliers, facilitating effective communication and coordination throughout the sourcing and procurement process. We ensure that both parties have a clear understanding of requirements, timelines, and expectations, helping to establish and maintain strong supplier relationships.

Quality control

To avoid any financial disaster, DocShipper provides comprehensive quality control services that are often recommended to ensure that products meet the client's specifications and expectations. Meaning that the products correspond to what has been contracted with the supplier and that there are no manufacturing defects or omissions.

This includes pre-production inspections, in-line inspections, final random inspections, and production monitoring. They conduct on-site inspections at factories and provide detailed reports on product quality and compliance.

Supplier communication and sample advice

To order a sample after negotiating the terms with the supplier for the new product, effective communication is required. Most suppliers will charge for a sample shipment unless the consumer and the supplier have a long-standing business relationship. So, let me pose a few queries. How can I acquire samples? Can I obtain samples for nothing?

DocShipper is here for you and gives you advice on having them free. For example, communicate to the supplier that they have been selected as the unique supplier for the product in question and that further orders will be placed for future business. Or, make it clear to the supplier that the company’s official policy does not authorize payment of the sample, he must therefore accept and respect the general conditions of the company. 

These are just some service examples among a lot of them that DocShipper has to propose.

If you are interested in DocShipper services, make sure to fill in the contact form.