The success of any organization depends on expertise on product sourcing. At the time of product development, the Top Management gives the product development team the target of the end Product cost for Sourcing. Cost is one of the very important aspects of any business. To sell the product in the mass market, the brand has to be very competitive with differentiating quality. If the product will not be competitive it will not sell in the mass market until and unless it has high brand value and developed for a Rich class who needs exclusivity & ready to pay a good amount for unique products.
Sourcing and costing (How to identify resources): What are the three key elements of costing and Sourcing. How to decide the source from which Organization one should source a particular product? Following three criteria has been defined to finalize the right source or Organization.
Quality: Required quality by customer, Buyer or Management expectation or we can say brand market position.
Price: the price of each product should be less or the same as compare to similar product’s supplier.
Timely delivery and commitment: Lot of products are seasonal and have deadlines to launch in the market. If things get delayed then whole investment become waste or the company’s balance sheet get affected, So timely delivery is a very important aspect. In terms of commitment the required quantity should be delivered as per the purchase order in agreed quality, it should not be less.
At the time of Costing following elements have
to be taken care.