Comparison of Sourcing Strategies - Essay Example

Running Head: Sourcing Strategy Comparison, An Executive Summary A Paper on the Comparison of Sourcing Strategies In APA Style The sourcing strategy in an organization can be considered as one of the most important tools toward the achievement of goals. The main objective in the study undertaken is to be able to summarize concepts that are related to sourcing methods. There are different factors that can be considered in terms of the determination of the effects and the understanding of the sourcing process.

One of the factors to be considered is the type of operation in a company namely the manufacturing- or service-related. In the case of manufacturing firms, included in the main types of sourcing needs are the sources of raw materials (direct, indirect and capital goods) and the sourcing for operational needs that can include labor. On the other hand, service organizations concentrate on the need to have the resources and facilities to be able to provide services. In terms of services, outsourcing can be considered as one of the main trends (Park, Reddy and Jurn, 2001; Seshadri, 2005).

The supplier base can be considered as one of the most fundamental concept in the process of sourcing. This can be attributed to the fact that regardless of the nature and type of business getting materials and services from other companies and providers can be considered inevitable. Due to the need for sourcing, strategy in terms of choosing the supplier base can be the key to the achievement of business and organizational success. It is important then to be smart and properly rationalize the components of the supply base.

This is due to the underlying complexity of the process (Park, Reddy and Jurn, 2001; Seshadri, 2005). One of the most important strategic advantages in terms of managing the supplier base is by having fewer and solid suppliers for the materials and services needed in operation. In addition, it is important to consider that local suppliers can be given priority to be able to lessen the processes needed to be undertaken as well as periodically check the quality of the materials and services procured (Park, Reddy and Jurn, 2001; Seshadri, 2005).

In the complex interaction of the supplier and the organizations supplier alliances are being established. In cases wherein there are changes in the supplier alliances in terms of the support given to a particular provider, the main affected are is the supply chain. This can be related to the importance of following the strategic allocation of sourcing services. If a particular supplier failed to provide the materials or service needed the whole process is disrupted and the end product cannot be achieved (Park, Reddy and Jurn, 2001; Seshadri, 2005).

Based on the study undertaken then, sourcing can be considered as one of the inevitable development of the current era to be able to answer the demands of the international community in a variety of goods and services. For that matter, strategic decision making process in relation to sourcing is needed to be undertaken to optimize the advantages and benefits that can be derived from the said concept and process. References Park, H.Y., Reddy, C. S. and Jurn, I. (2001). Sourcing Strategies of Manufacturing Firms: Transaction Cost Implications.

American Journal of Business Fall 2001 16(2). Seshadri, S. (2005). Sourcing Strategy: Principles, Policy and Designs. Springer.