When it comes to securing inventory there are two main approaches that companies can take. The first is known as sourcing – which is mainly applied to direct goods inventory. The second is procurement, which is more aligned with indirect inventory supplies. Simply put, sourcing is a strategy that is meant for companies who stock pre-made, pre-assembled final consumer products. An example of this would be a computer and technology store that resells a whole portfolio of brands, makes and models. This store would source the fully built computers and laptops from suppliers and then resell them to consumers. Whereas in the same industry, a company that utilizes procurement would be the company that builds the computers themselves and then sells those products to consumers. In some rare cases, there are companies that need to utilize both sourcing and procurement in order to maintain their inventory. Similarly, sourcing can be a function of procurement software that a company employs. 

Procurement teams need to build effective strategies that are best suited to optimize and strengthen their own supply-lines. These strategies can be a conglomerate of procurement and sourcing, or predominantly lean one way or the other. There are plenty of tactics involved in building a strategic sourcing process into an organization, that lead to higher efficiency, and overall life-time savings. 

No matter if your procurement or supply-chain team is going to focus on building procurement strategies, or sourcing strategies, it’s likely that they’ll need to utilize software to bolster their capabilities and help them better filter out suppliers. The use of e-sourcing and e-procurement software empowers supply-chain teams to optimize company savings, and focus on maximizing the efficiency of the internal procurement cycle where possible. 

The Pros and Cons of Sourcing and Procurement

Sourcing and procurement both come with their own sets of pros and cons. Within any specific organization, these pros and cons could differ, as individual company situations should also be taken into consideration when building a comprehensive supply chain strategy. It’s also important to note, that while these strategies do pose differences, there will be a lot of similarities between the actual processes and procedures. Securing the highest quality suppliers at the lowest possible rates, while maximizing company savings, and leveraging the marketplace as much as possible is the ultimate goal of each. 


The sourcing process contains many of the same steps as the procurement process. That’s because at their distilled cores, procurement and sourcing processes are nearly the same. One of the main functions of the sourcing process is conducting a spend-analysis that provides deeper insight into a companies spending habits, and highlights unnecessary spending within the sourcing process. These areas of unnecessary spending can be rectified with proper contract-management, conducted by e-sourcing software. This allows contract managers to gather more data in real time on suppliers, while also soliciting for bids, and proposals on supply chain needs. This ultimately leads to an element of savings-management which benefits the company in the long run by prioritizing both quality and unit pricing. E-sourcing software also considers market positions, working budgets, and other variables that ease the sourcing process from top to bottom. 


Procurement processes are going to be very similar to sourcing procedures. While a procurement cycle might be a bit more comprehensive, as it applies through the entire vertical of the company, the supplier communication aspect is going to be extremely similar. Procurement professionals equipped with powerful and robust procurement software utilize this software to gather supplier-bids, filter out poorly rated suppliers who don’t meet industry standards or refuse to comply with industry regulations. All of these built in functions of procurement software, allow procurement professionals and sourcing professionals alike to maximize their company savings, manage suppliers, and cultivate bids on new contracts when they become available. 

Whether your company utilizes procurement or sourcing as their supply-chain management strategy, ProcurePort has powerful software ready to assist. The ProcurePort product suite is both powerful and user friendly, all while offering robust and comprehensive tools. Fully allowing procurement and sourcing professionals to get the most out of their time, maximize efficiency, and optimize company savings.

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