Overview of Sourcing and Procurement in an Integrated Supply Chain

Overview

A basic overview of how we conduct sourcing and procurement in our company; it is a necessary process to screen suppliers and make sure they are able to manufacture products according to our client’s preferences and also live up to our quality standards by providing samples of their work.

Article Highlights

  • To find out the quality these suppliers offer and not just stick to the supplier evaluation.
  • How we differentiate the different product samples suppliers give.
  • Creating the Sample Order Terms to save time and help reduce expenses from sample revisions.

Following the supplier assessment, we will be tooled with knowledge of supplier/s we have chosen to work with, we must find out the quality these suppliers can offer and not just stick to the supplier evaluation. This phase is the sourcing and procurement plan. However, there are different kinds of samples these suppliers can give. What exactly do we need and how do we assess the product samples given to us during the sourcing and procurement phase? We first need to differentiate the different product samples suppliers give.

sample procurement introduction sourcing and procurement - intrepid sourcing

Types of Product Samples for Sourcing and Procurement

  1. Factory Sample

It is a ready-made product from the supplier produced without the specifications of the new client. The factory sample is a clear evidence of the supplier’s capabilities. In our experience doing the sourcing and procurement plan, suppliers often give out their most popular product as factory sample to play it safe.

  1. Pre-Production Sample

It is a product sample produced based on the client’s specifications. Clients rarely get satisfied with the first pre-product sample presented to them and revisions are unavoidable. This situation is when the supplier assessment process becomes instrumental, because if you were able to gather multiple potential suppliers, then you should have multiple pre-production samples to quicken the sourcing and procurement process. As a result, work is more efficient compared to having a single supplier.

  1. Batch Sample

This is a sample collected from a batch of manufactured goods for product testing purposes, quality check and functionality tests. It is ideal for a third party to collect the batch sample to make sure the supplier does not interfere with the selection process and this usually applies in most sourcing and procurement strategies.

Most of the time, our company focuses on creating pre-production samples. We draft a document called Sample Order Terms as a part of our effective sourcing and procurement strategy to make sure the client’s needs and supplier’s capabilities are immediately met which saves time and avoid revisions. We cannot move past the sourcing and procurement phase as long as Sample Order Terms aren’t filled out.

Sample Order Terms Information for Sourcing and Procurement:

  1. Photo/illustration of the design
  2. Dimensions
  3. Preferred color
  4. Price/budget
  5. Product category/industry
  6. Order quantity

Other product specifications exist which we may need for our sourcing and procurement process but the ones mentioned above are by default the specs we ask from clients and our suppliers require for our sourcing and procurement plan. Creating the Sample Order Terms document as the basis for both supplier/s and client will not only save time but will also help us all reduce expenses from sample revisions simplifying the sourcing and procurement process.

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