Worker using a machine in factory


Worker using a machine in factory

Sourcing refers to the practice of finding the best goods and services that need to be engaged with each other.

What Is Sourcing?

Sourcing refers to getting another company or department to do certain steps of a project, service or good and then having them send the product back to you. This involves many different practices including outsourcing, strategic sourcing, staff sourcing, in sourcing, net sourcing and more. Outsourcing is one of the most common types of sourcing for businesses and it involves contracting out a business service or function to a third party company or business. Outsourcing is often done in the development and assembly of products including electronics and automotive parts. Sourcing may involve the pieces and tools necessary to complete a project or the raw ingredients required. Quality control is very important to have in place to make sure that all of the sourced product meets the standards and regulations in place. Staff sourcing involves locating the right employees to fit job roles within a given business. In-sourcing is another very common type of sourcing that involves assigning a certain person a job role with the company structure. Net-sourcing uses an established and reputable services, hardware and software applications on the computer to create a better flow within business by working through a third party vendor. These sourcing practices help to streamline business practices allowing them to be cost-effective and efficient. Pricing is a very important aspect of sourcing because the cheapest price to do a certain part of the project can help to increase the profit margins of the product.

What Industries Use Sourcing?

Many different industries use sourcing. These industries include manufacturing, packaging, materials handling, food processing and more. There are many reasons why a industry may use sourcing including cheaper products, labor and raw materials. Sourcing can also be used when a product or service is in high demand and the original supplier/ manufacturer cannot keep up. This often occurs because of a seasonal process or it may happen due to a high growth in sales.This allows for companies to continue to meet the consumers needs with ease. Companies that use outsourcing must look for mutually beneficial companies that have a good reputation and a high quality of work.


There are many benefits for using sourcing. The different types of sourcing available can help to keep a company competitive. Utilizing the right type of sourcing for a company can help to decrease costs and increase productivity. Sourcing can also help with many business related projects and functions that do not require full-time employees. Sourcing can help a company to be profitable by minimizing costs.