A sourcing company overall acts as a specialised intermediary between their client and third-party suppliers. They provide expertise, market knowledge, and operational support to ensure efficient and cost-effective procurement.
Sourcing companies will typically engage in the following activities:
Finding and evaluating right suppliers:
Sourcing companies research and identify potential suppliers based on their client’s requirements, industry expertise and market knowledge. They will then create a database of reliable suppliers and maintain relationships with them. In evaluating these suppliers, they will often conduct site visits, interviews, and background checks to ensure the suppliers meet the client’s standards.
Request for Proposal (RFP) management:
Sourcing companies help clients create comprehensive RFPs that outline the specifications and requirements for the products or services needed. They will generally manage the entire RFP process, including sending the RFPs to potential suppliers, collecting and analysing the responses, before finally shortlisting suitable candidates.
Negotiation and contracting:
Sourcing companies negotiate with suppliers on behalf of their clients to secure favourable terms, prices and contracts. They will utilise their industry knowledge and bargaining power to achieve the best possible agreements.
Quality control and inspection:
Sourcing companies may conduct quality control checks and inspections to ensure that the products or services meet the required standards and specifications. They may inspect the manufacturing facilities, perform sample testing and implement quality assurance processes to ensure consistency and reliability.
Logistics and shipping:
Sourcing companies handle logistics and shipping arrangements, including coordinating transportation, customs clearance and delivery to the client’s location. They will usually work closely with freight forwarders, shipping companies and customs agents to ensure smooth and timely delivery.