What does the term "sourcing" refer to in logistics?

The term "sourcing" in logistics primarily refers to the selection of suppliers and management of procurement. This process is crucial as it involves identifying and evaluating potential suppliers who can provide the necessary goods or services required by an organization. This includes negotiating contracts, assessing supplier performance, and ensuring that the materials procured meet the specific quality and cost standards.

Effective sourcing helps organizations improve their supply chain efficiency by ensuring that the right products are available at the right time and price. This strategic element of supply chain management directly supports operational objectives and can significantly impact overall business success. Understanding sourcing is vital for any logistics professional, as it lays the groundwork for building and maintaining productive supplier relationships.