Selecting a supplier requires proper research and strategy. If companies handle the sourcing themselves, there’s no shortcut. For example, if one party is having temporary cash flow concerns, it can be discussed openly. When both parties know they can depend on each other, it opens the door to honest conversation. Managing Riskīesides identifying and solving problems, a strong relationship built of trust can help mitigate risk. Developing a close relationship can lead to higher quality (and efficiency) as suppliers and customers work together to identify and minimize the root causes of any defects that hurt both buyer and seller. Both businesses rely on each other to keep the supply chain intact. When you find the right source for your products, it truly becomes a partnership. Suppliers benefit because they have a consistent outlet for their goods which makes planning and cash flow more dependable. This reduces the costs of goods and keeps retail prices competitive. Buyers can typically negotiate lower unit pricing for high-volume purchasing. Strategic sourcing provides benefits for both buyers and suppliers. Strategic planning in the sourcing process is central to cost structure, profit margins, and competitiveness for businesses of all sizes. This keeps your shelves stocked and customers happy. ![]() What is sourcing in supply chain? Done well, sourcing allows companies to establish consistent supply chains.
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