LITERATURE REVIEW

These chapter review the works opinion and opinion of scholars, and on the subject matter role of sourcing in the achievement of the profit objective of organization. Sourcing is one of the aspect of purchasing activities and sourcing is important in any manufacturing industry.

2.1       Sourcing Concept  

According to Baily, Farmer, Crocker, Jessop and Jones. (2008) sourcing “involves much more than simply picking a supplier or contractor for each requirement in isolation, it involves continuing relationship both with preferred sources which are actually supplying goods and service and with potential sources which may have been passed over for the present but are still in the running” (p.199).

Lenders, Johnson, Flynn and Fearon (2006) point out that sourcing “involves various sources of information, the buyer is able to make up a list of available suppliers from whom the necessary items can be acquired and find out which supplier might be able to meet buying organizations requirement”. (P 269) Hassan (2008) defines sourcing as to involve “the identification and development of suitable source of supply, systematic investigation and comparison of supplier how many to allocate business to terms and conditions and continuing relationship with both preferred and potential supplier” (p.124).

Lysons and Farrington (2006) define sourcing as “the process of identifying, selecting and developing suppliers is a key purchasing activity. Sourcing can be either at tactical and operational sourcing”. (P. 367).

Summary of Opinions

Apparently all the views of the authors reviewed on sourcing are all the same, these can be seen in their definition, i.e Baily, Farmer, Crocker, Jessop and Jones defined sourcing involves much more than simply picking a supplier, it involves continuing relationship both with preferred source and with potential sources, and all the other authors followed the same step in their definition although define differently but the fact that they all referred to the same thing can not be ignored base on key terms that are identifying, developing suppliers, continuing relationship with both preferred and potential supplier except, Lysons and Farrington also define in the same way but they went on to explain that sourcing can be either at tactical and operational sourcing.

2.2       Sources of Supplier Information

Lysons and Farrington (2006) stated that sourcing “information can be divided into the area as follows:-

Sourcing information

Analysis of market condition

Directives

E-Sourcing

Locating supplier sources

Supplier assessment

Supplier performance rating.

According to Baily, Farmer, Crocker, Jessop and Jones (2008) stated that “when collecting and collating information on potential suppliers, the internet has revolutionized companies, ability to locate potential suppliers. In addition, the following point ought to be considered.