EXTERNAL SOURCING Meaning and
Definition
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External sourcing is a business strategy that involves obtaining goods, services, or expertise from sources outside of the organization. It refers to the practice of acquiring resources or support externally rather than relying solely on internal capabilities.
In the context of procurement and supply chain management, external sourcing involves outsourcing or subcontracting various aspects of production, distribution, or customer service to external suppliers, vendors, or contractors. This can include the purchase of raw materials, components, equipment, or finished products from external sources.
External sourcing offers several advantages to organizations. Firstly, it enables companies to access specialized skills, expertise, or resources that may not be available internally. This can allow organizations to enhance their capabilities, reduce costs, or improve efficiency. Secondly, external sourcing can help organizations to focus on their core competencies and strategic priorities by delegating non-core functions to external experts. Thirdly, it can provide companies with greater flexibility and agility in responding to market dynamics, as they can adjust their sourcing strategies based on current demand, cost factors, or changing business conditions.
However, external sourcing also entails potential risks and challenges. These may include issues related to quality control, intellectual property protection, supply chain disruptions, or loss of control over certain business functions. Therefore, organizations need to carefully assess and manage the associated risks and benefits when deciding to engage in external sourcing practices.
Common Misspellings for EXTERNAL SOURCING
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Etymology of EXTERNAL SOURCING
The word "external sourcing" is a compound term consisting of two words: "external" and "sourcing".
The term "external" comes from the Latin word "externus", meaning "outward" or "outer". It entered English in the 17th century, and its usage refers to something outside or beyond a particular boundary or entity.
"Sourcing" comes from the Old English word "sourcian", meaning "to rise". It originally referred to the rising of a spring or fountain. Over time, it developed to mean the act of obtaining or acquiring something. In the context of business and economics, "sourcing" refers to the process of locating, identifying, and obtaining goods, services, or resources from external suppliers or vendors.
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