Procurement is getting the materials you need, sourcing is establishing who can give you those materials
▻ Despite being sometimes used interchangeably, procurement and sourcing are two related and yet slightly different terms. By taking a brief look at the differences between them, we will understand better which term to use and when.
Procurement
The term procurement involves the full process of gathering information, sourcing and then using suppliers to obtain all the materials needed for your business activity, such as raw materials, or services. It is an end-to-end process that covers a wide variety of steps that go from handling inventory and planning needs up to negotiating pricing, finalising the purchases and its delivery. A solid and flowing procurement strategy is at the root of the whole supply chain, thus determining the efficacy of the overall manufacturing process.
Sourcing
Sourcing is essentially the stage that comes before purchasing. In fact, prior to buying the desired materials, information must be gathered, suppliers must be found, assessed and defined. We can consider sourcing as the process of balancing between the quality of raw materials and their affordability. If the sourcing process is streamlined and efficient, your whole business will benefit in terms of products’ quality, price competitiveness and lead time.
In a nutshell, we can see procurement as the process of getting the materials you need, and sourcing as establishing who can give you those materials.
Going digital
According to the research centre Digital Commerce 360, the fastest growing B2B sales channel currently is eProcurement: by 2025 over 80% of B2B sales interactions between buyers and suppliers will occur through digital channels.
For this reason at Sino LifeScience we decided to launch a B2C-focused eProcurement platform for the ingredients market. Sino LifeScience blends together an intuitive eCommerce-like environment with a handful of feature essential for an effective B2B procurement process, such as the possibility to promptly get in touch with our sales team and privately negotiate individual sales conditions.
We believe service innovation improves everyone’s job to be done. Since innovating is an ongoing process and we like to stay ahead of the game, here’s a brief survey we designed to better evaluate, understand and case-study the digital shift in the procurement process of Hyaluronic Acid. It won’t take long, we promise.
