INFORMATION

Information consists of data and analysis regarding inventory, facilities (location, capacities,
etc.) transportation and customers throughout the supply chain. Information affects each of
the other drivers and hence is the biggest driver of supply chain performance. Information is
helpful in making the supply more efficient and responsive at the same time.
For example, information regarding customer demand patterns results in a more accurate
forecast of demand, which in turn will enable a firm to produce the required quantity of the
product at the right time to meet customer demand. This makes the supply chain more
responsive and yet efficient.
SOURCING
Sourcing is another important area in supply chain management. The source is a specific
location or enterprise from here goods are obtained.
Sourcing is the right activity of buying or procuring the right materials in the right quantities
of the right quality, in the right condition, at the right time, at the right price from the right
supplier.
The term outsourcing should not be confused with the term sourcing as they are different.
Outsourcing s the term used to describe the activity of purchasing parts, components,
assemblies, and other services that were previously done within the firm, from sources
outside the firm.
An effective procurement strategy involves volume consolidation through a reduction in the
number of suppliers (like sources). By consolidating volumes with a limited number of
suppliers, buyers can increase their negotiating strength in relation to the supplier.
Purchasing in large volumes allows the suppliers to improve economies of scale and also to
make investments in capacity or processes to improve customer service.
But when a single source of supply is used by the buyer firm, it has a higher risk of going out
of stock when supply gets delayed.
Managers are responsible to take “make or buy” decisions and also take decision regarding
which tasks to be outsourced and to whom whether a single supplier or a number of suppliers.
Managers then select suppliers and negotiate contracts with each supplier and are structural to
improve supply chain performance (flow of materials, information, and funds).
Once the sourcing process is completed, the procurement process that facilities order
placement and delivery of orders play a major role.
Sourcing decisions play a crucial role in logistics and supply chain management as the effect
of the level of efficiency and responsiveness of the supply chain.

Key sourcing decisions that are made within a firm include the following-
1. In house manufacture or outsource.
2. Supplier selection.
3. Procurement.
The logistics and supply chain management is driven by sourcing/outsourcing decision made
by managers because the location of suppliers, the volume of goods delivered, frequency of
suppliers, prices quoted, terms and conditions of supply, return goods handling and
replacement, packaging supplier relationship, etc., have a great impact on the performance
of logistics and supply chain functions.
Also, one of the major challenges of business today having a major impact on logistics
management is the increase in international sourcing, particularly from low-cost countries
such as China and Malaysia.
International sources increase the complexity of logistics and supply chain function because
of enhanced costs of transportation, inventory, warehousing, etc. which may offset the cost
advantages gained because of low prices for materials, components, etc., which are bought
from global suppliers.