Sourcing is really just another word for outsourcing, which means you contract out your work to another company and they complete it for you and then ship it back. However, if the contractor is putting the finishing touches on a product, they may ship it out to your customers, clients or retail outlets. Sourcing involves a few different tasks such as floating requirements and specifications of the goods or services to prospective contractors, getting quotations and samples from them, approving or certifying the contractor, placing the order for goods with them and finally ensuring that the right goods of the right quality are delivered at the right time. It is a very important process for manufacturing companies and is usually handled by the purchasing party or vendor development department.

Most organizations cannot or do not manufacture all of the components and sub-assemblies that go into a finished product. Standard components such as electronic items, wires, and cabling, etc. can be sourced quite easily to other companies. These contracted companies may offer you a variety of services and jobs such as: customized parts, machined components, castings, forgings, special equipment, and special services that require the maximum attention.

Since the requirements of your products such as dimensions, chemical composition and volumes, are unique for each product, identifying reliable contractors who can supply the correct goods at the best price becomes very important. In some cases the manufacturer will ship out all of the ready made components and the contractor will only assembly them, and perhaps package and ship them out as well.

Sourcing may also include services such as: back office operations, data logging, call centers, automotive and electrical components, etc. The contractors are often located at different locations or even in a different country. In such cases, logistics and time delays play a very important role as you have to move the freight over a greater distance.

The sourcing out of work is also common during a busy manufacturing season or when there is a plant shut down, or maintenance is being performed. When sourcing out work, it is very important that you find a reliable company or companies to do the job as it is ultimately your name that will be on the final product.

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