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Sourcing

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Procurement Pillar

Sourcing Hub

Strategic sourcing, RFx design, supplier evaluation, global trade compliance, freight and carrier contracting, and the trade-finance terms that decide what a purchase really costs. Thirty-six practitioner guides, organised into five focus areas.

Start with strategyHow sourcing worksFAQ
36Expert guides
5Focus areas
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Explore Sourcing by focus area

Sourcing is where procurement strategy meets the physical and legal realities of moving goods across borders. Each area below groups the guides you need for one stage of that journey.

Area 01Sourcing Strategy & RFxCategory management, supplier discovery, RFP/RFQ/RFI design, evaluation criteria and sourcing risk.7 guides β†’ Area 02Customs, Duties & Trade ComplianceOrigin rules, carnets, bonded cargo, anti-dumping and ad valorem duties, customs entries and forwarder governance.9 guides β†’ Area 03Freight Contracts & Carrier SelectionCarrier qualification, common vs contract carriage, tariff structures, brokerage fees and lane master data.8 guides β†’ Area 04Ocean Shipping & Charter TermsBCO contracting, charter-party terms, cabotage, vessel classification and marine trading-risk controls.6 guides β†’ Area 05Trade Finance & Supplier TermsDocumentary collections, bilateral commitments, CKD sourcing, export intermediaries and development-funded procurement.6 guides β†’
Framework

How strategic sourcing works

Strategic sourcing is the discipline of treating every significant spend category as a portfolio to be managed rather than a series of purchase orders to be placed. Instead of reacting to requisitions, the sourcing team profiles the category, studies the supply market, chooses a strategy that fits the risk and leverage of that category, runs a structured competitive event, and then governs the resulting supplier relationship against measurable targets. Done well, it typically releases 5–15% of addressable spend in the first cycle and, more importantly, replaces guesswork with a defensible decision record.

The seven-step model below is the operating backbone used across the guides in this hub. Steps one to three are covered in depth in Strategic Sourcing: The Complete Procurement Guide and Category Management in Procurement; steps four and five in RFP, RFQ and RFI and Supplier Evaluation Criteria; steps six and seven connect to the Vendor Management and Cost Reduction pillars.

  1. Profile the categoryMap total spend, volumes, specifications, current suppliers, contract end dates and internal stakeholders. Cleansed spend data is the non-negotiable input.
  2. Analyse the supply marketSize the market, identify capable suppliers on three continents, study cost drivers (commodities, labour, energy, tariffs) and assess switching costs.
  3. Set the sourcing strategyPosition the category on a Kraljic-style matrix: leverage, strategic, bottleneck or routine. Decide single vs dual sourcing, regional vs global, and make-or-buy.
  4. Choose and run the RFxSelect RFI, RFP or RFQ based on how well the requirement is specified; publish weighted criteria before bids arrive so evaluation is auditable.
  5. Negotiate and selectCompare total landed cost, not unit price. Include duties, freight, payment terms, currency, inventory and quality cost in every scenario.
  6. Implement and transitionContract, onboard, load master data, run parallel supply where continuity matters, and communicate the change to every requisitioner.
  7. Monitor and benchmarkTrack realised savings against identified savings, supplier performance, compliance to contract and market movements β€” then reopen the cycle.

RFI vs RFP vs RFQ β€” which sourcing event fits?

EventUse it whenWhat you get backTypical timeline
RFIYou are still learning the market, the specification is open, or you need to shortlist from a long list of unknown suppliers.Capability statements, indicative pricing, references β€” information, not offers.2–4 weeks
RFPThe outcome is defined but the solution is not; you want suppliers to propose how to deliver it and will weigh quality, approach and risk alongside price.Binding proposals scored against published weighted criteria.6–12 weeks
RFQThe specification is fixed and comparable β€” parts, commodities, standard services β€” and price plus lead time decide the award.Firm quotations, often line-by-line, suitable for reverse auction.1–3 weeks
Pro tip: score total landed cost, not the quoteFor imported goods the quoted unit price is frequently under 70% of what reaches your warehouse. Add duty (ad valorem or anti-dumping), freight and surcharges, insurance, brokerage, financing cost of the payment term, and the inventory you must hold to cover transit time. The Customs and Freight areas below exist because these line items decide most cross-border awards.

Sourcing KPIs worth tracking

Realised vs identified savingsThe gap between the savings a sourcing event promised and what finance can see in the P&L. Below 70% signals a compliance or implementation problem.
Spend under managementShare of addressable spend covered by a sourcing strategy and contract. Mature teams sit above 80%.
Sourcing cycle timeDays from approved requisition to signed award, by event type. Long RFPs are usually a specification problem, not a supplier problem.
Supplier concentrationShare of category spend with the top supplier and top region. A single source above 60% in a bottleneck category needs a documented mitigation.
Landed-cost accuracyForecast landed cost versus invoiced landed cost per shipment. Drift here means tariff classification, freight tariffs or surcharges are not under control.
Maverick spendPurchases made outside awarded contracts. Every point of maverick spend erodes the savings you reported.
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Area 01

Sourcing Strategy & RFx

The core playbook: how to build a category strategy, discover and qualify suppliers, run a clean RFP/RFQ/RFI process, select on evidence and manage sourcing risk in a tariff-volatile world.

Browse all strategy & RFx guides β†’
Area 02

Customs, Duties & Trade Compliance

What decides the landed cost and legal exposure of an import: certificates of origin, ATA carnets, bonded cargo chains, blanket bonds, consumption entries, ad valorem and anti-dumping duties, and the governance of the forwarders who file on your behalf.

Browse all customs & trade guides β†’
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Area 03

Freight Contracts & Carrier Selection

Contracting the movement: how to qualify carriers, choose between common and contract carriage, read commodity and blanket tariffs, control broker commissions and keep lane master data reliable.

Browse all freight & carrier guides β†’
Area 04

Ocean Shipping & Charter Terms

For teams that contract ocean capacity directly: BCO contracting, bareboat and ballast-bonus charter terms, cabotage rules, mixed-use vessels, classification certificates and warranty-limit controls.

Browse all ocean shipping guides β†’
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Area 05

Trade Finance & Supplier Terms

The commercial terms behind the shipment: documentary collections and collecting banks, bilateral supplier commitments, CKD equipment sourcing, timber measurement conventions, outsourced export channels and development-funded local procurement.

Browse all trade finance guides β†’
Keep going

Related Procurement pillars & tools

Sourcing hands off to these pillars once a supplier is selected. Use the tools comparisons to shortlist e-sourcing, spend-analysis and supplier-management software.

Procurement Tools & ComparisonsE-sourcing, P2P and SRM software compared Vendor ManagementOnboarding, scorecards, SRM Supply ChainPlanning, logistics, resilience Contract NegotiationTerms, tactics, clauses Cost ReductionSavings programmes and tracking Procurement Department HubAll pillars, news and guides
FAQ

Sourcing questions procurement teams ask

What is the difference between sourcing and procurement?

Procurement is the end-to-end function β€” from identifying a need through payment and supplier management. Sourcing is the upstream, strategic part of it: analysing the category and the supply market, selecting suppliers through a competitive process and setting the commercial terms. Purchasing (raising and expediting orders) is the downstream, transactional part.

When should I use an RFP instead of an RFQ?

Use an RFQ when the specification is fixed and offers are directly comparable on price and lead time. Use an RFP when the outcome is defined but suppliers should propose how to deliver it, and you will score approach, quality, risk and price together. If you cannot yet write the specification, start with an RFI.

What is total landed cost and why does it matter in sourcing?

Total landed cost is the full cost of getting a product to your door: purchase price plus freight and surcharges, insurance, customs duties (including anti-dumping or countervailing duties), brokerage and documentation fees, financing cost of payment terms, and the inventory carried to cover transit. Awards made on unit price alone frequently reverse once these are added, which is why the customs and freight guides in this hub sit alongside the strategy guides.

Should we single-source or dual-source a category?

Single sourcing maximises leverage and simplifies management but concentrates risk. Dual or multi-sourcing is justified for bottleneck and strategic categories, for items exposed to tariffs or geopolitical disruption, and wherever a supply interruption would stop production. A common compromise is a primary supplier with 70–80% of volume and a qualified secondary carrying the remainder so it is ready to scale.

How do we measure whether sourcing is actually saving money?

Track realised savings against identified savings, agreed with finance on a defined baseline (previous price, market index or budget). Add compliance to contract (maverick spend), supplier performance and landed-cost accuracy. Savings that finance cannot see in the ledger are not savings.

Last Updated: September 2026 · Reviewed by the Kurums Procurement editorial team.