An Introduction to Sourcing Software
Sourcing is a key step in the manufacturing process as it ensures the company has the materials needed to make the desired parts and products. While manufacturers can do their sourcing manually by mail or phone, it is far more efficient to use sourcing software designed specifically for the task. Below, we highlight what this technology is, how it benefits manufacturers, and what types are available.
What Is Sourcing Software?
Sourcing software—also called electronic sourcing, eSourcing, e-sourcing, or strategic sourcing software—is a web-based program used for supplier identification, evaluation, and selection. It collects and compares information about prospective supplier partners to help companies choose the one that best meets their sourcing needs.
While these programs do not manage every aspect of the procurement process, they do reduce the amount of time spent on the sourcing stage so companies can move the project forward. Some of the elements they can handle include:
- Collection of supplier information and supplier selection
- Supplier quote request delivery
- Information evaluation
- Bid managing
- Contract selection
Common Sourcing Software Tools
An important step in the esourcing process is eRFx. eRFx stands for electronic request for “X”. The “X” can mean a number of things, such as “information” (I), “proposal” (P), and “quote” (Q). Sourcing software often has eRFx management tools to help create, send out, and store these requests. Three of the most common are:
- Request for information (RFI). RFIs are helpful when a buyer wants to know what options are available to them. They are used to collect and evaluate high-level information about potential suppliers. The information typically focuses on broader capabilities rather than specific product/service offerings or costs.
- Request for proposal (RFP). RFPs are for when the buyer knows what they want and wants suppliers to tell them how they will meet their needs. The buyer can either ask for a specific solution (i.e., I want a material with these specifications. Can you provide me with it?) or a solution for a specific outcome (i.e., I want this outcome. What are the potential solutions?). The supplier then provides the details of their offering, including attributes such as pricing, delivery terms and other relevant information.
- Request for quotation (RFQ). RFQs are used in the final stage of the sourcing process to ensure the buyer gets the best deal. They allow the buyer to negotiate the terms of the contract, particularly with regard to pricing. Other contract elements that can be negotiated include payment method, service requirements, and quantity discounts.
QLM Sourcing Software by QSTRAT
Looking for sourcing software to streamline your sourcing operations? QStrat is here to help! Our QLM Sourcing software is a cloud-based program that enables you to manage all of your sourcing projects in a single, centralized location with a consistent and manageable process. From the automatic selection of the right suppliers to include in an event, to the collection and evaluation of supplier bids, to managing RFx approval workflows, it can do it all! To learn more about QLM Sourcing and what it can do for your business, contact us today.