What is Source?
The source is the process of identifying vendors who will procure goods and services to fulfill planned demand in the most efficient and economical way. The process involves certain standards that suppliers have to fulfill to make sure the business delivers quality goods to the customer.
Significance of Source in an E-commerce Shipping and Delivery
Businesses can source products from trustworthy vendors to make sure they offer quality items while earning profit margin from sales. Here are some of the significance of a source.
- Customers’ demands fulfillment
The source helps businesses to fulfill the customers’ demands by obtaining goods as per inventory planning.
- Financial profit
Companies can adopt sourcing to maintain a minimum inventory approach to avoid loss of revenue.
Prerequisites for Source
Here are some of the prerequisites of a business’ source.
- When sourcing perishable products, it is required to have a minimum supplier’s lead time that will support a minimal inventory tactic.
- When sourcing non-perishable products, it is imperative that the supplier’s estimated lead time is less than the number of days by when the inventory arrives at zero. Hence, it ensures no revenue loss.
Use Case With Source
Suppose company X deals with the manufacturing and delivery of dairy products. It can use sourcing to choose a vendor who will cost-effectively and efficiently procure dairy products as per specified standards by the company. Thus, sourcing helps the company to deliver quality dairy products to its customers within the stipulated time.