What does the concept of “sourcing” in logistics refer to?

The concept of "sourcing" in logistics primarily refers to the evaluation and engagement of suppliers. This critical process involves identifying potential suppliers, assessing their capabilities, negotiating terms, and establishing relationships to secure the materials or products necessary for the supply chain. Effective sourcing is essential as it influences cost, quality, and reliability in logistics operations.

In the context of logistics, sourcing goes beyond simply finding suppliers; it encompasses strategic decisions about where and how to obtain goods, evaluating suppliers on criteria such as pricing, capacity, quality standards, and reliability. This allows businesses to maintain a streamlined and efficient supply chain, ensuring they can meet customer demands effectively.

While storage of goods, shipping of goods, and marketing of products are all integral parts of the logistics process, they do not capture the essence of sourcing. These activities are more aligned with the physical movement and management of goods rather than the strategic aspect of establishing supplier relationships that sourcing entails.