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Zhejiang ShiningHub Co., Ltd.
Zhejiang ShiningHub Co., Ltd.

What Types of Sourcing Companies Are There?

19 Aug , 2024

Sourcing companies come in various types and can be classified from different dimensions. The main classification is based on the purchasing entity, organizational structure, business scope, service object, operation mode, and purchasing region.


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Here are some of the main types of sourcing companies:


Classified by sourcing company

1. Personal sourcing company:

Such companies are usually small in scale and focus on meeting the sourcing needs of individuals or small businesses. They may offer a diverse selection of goods through online platforms or physical stores.


2. Group sourcing company:

This type of company serves large enterprises or organizations, reducing costs and improving efficiency through centralized procurement. They usually establish long-term partnerships with multiple suppliers to ensure a stable supply and price advantages.


Classified by organizational structure

1. Linear sourcing organization:

A single superior commands multiple subordinates directly, with strong management control, clear responsibilities, and high management efficiency. This is suitable for smaller companies with relatively simple sourcing business.


2. Line functional sourcing company:

On the basis of the line system, functional organizations are added, such as demand analysts, market analysts, supplier administrators, etc., to assist superior managers in broader and deeper management. This is suitable for larger, sourcing companies with complex procurement businesses, which can overcome the limitations of individual capabilities of line managers.


3. Division-based sourcing company:

With a focus on the business as the core, the management decision-making process is small yet comprehensive, with high operational efficiency. The business unit is directly responsible for the entire company, and the company has the right to control the general direction of the business unit. It is suitable for enterprises that focus on specific business functions (such as specializing in a certain product, market, or function).


4. Matrix-based sourcing company organization:

An organization formed by temporarily combining personnel from different departments around a specific task (usually temporary), which is dissolved after the task is completed. It is suitable for enterprises that need to respond quickly to market changes and complete temporary large projects.


Classified by business scope and service targets

1.A company focused on sourcing raw materials and components: 

Mainly serving factory manufacturing enterprises, collecting raw materials and components for product manufacturing. Large procurement volume, single and fixed procurement variety.


2. Sourcing Company Serving Large Supermarkets and Retailers:

Primarily collects daily marketing supplies to meet the diverse needs of supermarkets and retailers. The sourcing company deals with a wide variety of items, maintaining a broad scope and long-term consistency in procurement.


3. Government sourcing agency:

Serves government and administrative departments by sourcing daily office supplies, social relief materials, and strategic reserve materials. This type of sourcing company operates with high efficiency and centralization, handles large volumes, and must adhere to strict government procurement regulations and procedures.


4. Sourcing company of sales-oriented enterprises:

Mainly serving trading companies, the sourcing company determines the materials to be purchased based on sales tasks and market conditions. The procurement range is large, the quantity is small, and the varieties are not fixed.


Classified by operation mode

1. Traditional sourcing company:

Using traditional sourcing company processes and methods, relying on manual operations and paper documents, the efficiency is relatively low. Using traditional sourcing methods, such as inquiry, price comparison, bidding, etc., to purchase goods.


2. Modern sourcing company:

Using modern information technology tools (such as online procurement platforms, electronic order systems, etc.) to improve the automation and informatization level of the procurement process, achieving efficient and precise procurement management. Applying modern information technology and supply chain management methods to make the procurement process scientific and efficient. Such companies may adopt advanced procurement models such as MRP (Material Requirement Planning), JIT (Just-in-Time), and supply chain procurement.


Divided by sourcing region

1. Local sourcing company

Focus on the sourcing needs of the local market, able to quickly respond to and meet the immediate needs of local customers.


2. Global sourcing company

Such companies have the ability to purchase across borders, and can find the best quality goods and services from around the world. For example, Wal Mart's global procurement network is a typical case of a global sourcing company, which has achieved global procurement and supply of goods by establishing branches and satellite companies around the world.


There are various types of sourcing companies, each with its unique advantages and scope of application. The above classification is not absolute.

The type of sourcing company may vary due to various factors such as the size of the enterprise, industry characteristics, and market environment.

With the development of the market and the progress of technology, the types and service models of sourcing companies are also constantly innovating and evolving.

In practical operations, enterprises should choose the appropriate type of sourcing company according to their own procurement needs and business characteristics, in order to optimize the procurement process and improve efficiency.