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Sourcing process: definition and important aspects for buyers
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Sourcing process in a nutshell:
The sourcing process is a structured procedure for the systematic identification, evaluation and selection of suitable suppliers for required goods or services. For purchasing, it is a strategic core process that ensures optimal procurement in terms of quality, costs and risks.
Example: An automotive supplier conducts a 6-month sourcing process for electronic components, starting with the requirements analysis, through the tendering process to 8 potential suppliers, to the final selection of 2 main suppliers, which can reduce procurement costs by 23%.
Contents
What is the sourcing process?
The sourcing process in purchasing refers to the systematic procedure for identifying, evaluating and selecting suppliers for the procurement of goods, services or resources. This process is crucial to achieving the optimum balance between cost, quality and delivery time. Through a structured sourcing process, companies can secure competitive advantages by selecting reliable suppliers and building long-term partnerships.
Core elements of the sourcing process
Significance for purchasing
The sourcing process plays a central role in purchasing, as it contributes significantly to the optimization of procurement. An effective sourcing process leads to cost savings, improves the quality of the products and services purchased and strengthens supplier relationships. It also enables greater flexibility and responsiveness to market changes.
Sourcing process: from traditional procurement approach to eSourcing
The sourcing process has changed fundamentally in practice. Building on the theoretical understanding of the sourcing process as a systematic approach to supplier selection, the practical implementation is crucial to a company's success. Traditional methods are reaching their limits in the face of complex global supply chains and increasing demands for efficiency and transparency. There is therefore a need to transform the sourcing process and integrate modern technologies.
Old: Traditional sourcing
Traditional approach: In traditional sourcing, the search for suppliers is often carried out manually through direct contacts, trade fair visits or industry directories. Inquiries and tenders are handled by telephone, fax or e-mail. The exchange of information is time-consuming and there is a lack of centralized data storage. Offers are checked individually and comparative analyses are laborious, as data has to be recorded and evaluated manually. This approach is prone to errors, lacks transparency and can lead to long procurement cycles. It also lacks the agility to react quickly to market changes.
New: eSourcing
eSourcing: The modern sourcing process relies on digital solutions and platforms. eSourcing enables the electronic processing of tenders, bid comparisons and negotiations. Web-based tools enable suppliers to be researched globally and integrated directly. Automated analyses and online auctions improve efficiency and enable significant cost savings. Key innovations such as artificial intelligence and market analysis offer extended possibilities for supplier evaluation and risk minimization. Practical benefits include shorter procurement times of up to 50%, transparency across all process steps and a higher quality decision-making basis.
Practical example: Use of eSourcing in mechanical engineering
A medium-sized mechanical engineering company implemented an eSourcing platform to optimize the procurement process. Digitalization reduced tendering cycles from an average of 8 weeks to 4 weeks. Automated tender evaluation enabled a more accurate analysis of the total cost of ownership, resulting in savings of 15%. Thanks to real-time communication with suppliers, the time-to-market for new products improved by 20%. The increased efficiency and cost reduction contributed significantly to the company's competitiveness.
Conclusion on supplier evaluation
The sourcing process is a fundamental element of modern purchasing that contributes significantly to a company's success through systematic supplier selection and strategic procurement. The combination of a structured approach, digital technologies and sustainable practices enables companies to optimize their procurement processes and secure competitive advantages. Continuous adaptation to market changes and the integration of new technologies are particularly important in order to meet the increasing demands for efficiency and sustainability.
