Sourcing Material and Services - Essay Example

Logistics Purchasing refers to the transactional function that involves the buying of products and services. Given a business setting, it entails placing and processing purchase orders. Procurement refers to the business process which involves managing a wide array of processes concerning the needs of a firm to acquire goods and services that would be required directly in the manufacturing of a product or indirectly in the organisation’s operations. Strategic sourcing entails the acquisition of goods and services (Coyle, Langley, Gibson, Novack & Bardi, 2012).

These three are related in that strategic sourcing furthers the procurement process with a greater focus on the impacts of decisions on procurement and purchasing. It works cross-functionally in the firm so as to help in the realisation of the overall business goals of the organisation.These three have undergone evolution over time. As documented by Coyle et al. (2012), the traditional sourcing process involved tactical sourcing, limited supply base and functional purchasing. Then came strategic sourcing which emphasized on supplier relationships and non-traditional supply base.

The e-enabled procurement provided capability for e-sourcing, e-procurement and e-commerce. This paved way for integrated sourcing or supply chain which involves sourcing for a strategic supply chain process and seamless integration of the sourcing process and supply chain activity.To evaluate suppliers, companies should seek to establish relationships or alliances with them so as to enable them ascertain their ability to supply quality materials adequately over the given period of time and at an optimum cost (Coyle et al., 2012). Quality supplies of materials ensure quality final products.

Companies should also evaluate the ability of the supplier to contribute to its competitive advantage: to promote low cost, niche orientation or differentiation. According to Mangan, Lalwani and Butcher (2008), evaluation could be undertaken through competitive bids or direct negotiations. Recently, Internet auctions have also become popular evaluation strategies.ReferencesCoyle, J. J., Langley, C. J., Gibson, B. J., Novack, R. A. & Bardi, E. J. (2012). Supply chain management: A logistics perspective (9th ed.). Mason, OH: South-Western Cengage Learning.Mangan, J., Lalwani, C.

& Butcher, T. (2008). Global logistics and supply chain management. West Sussex, PO: John Wiley & Sons.