ABSTRACT
Modern businesses are inundated with enormous business activities and processes, some of which are core and/or auxiliary. A critical question or dilemma for many business firms is whether to buy or to make. Sourcing encapsulates back-end and front-end concerns of supply chain activities. While front-end considerations include distribution, consumer services and customer relationship management, back-end concerns concentrate on identifying and selecting appropriate source, controlling suppliers, designing sourcing mechanisms and managing supplier relationship. Functional sourcing is basically the purchasing management approach based on system theory. The major activities undertaken in functional sourcing are identifying vendors, creating a profile of vendors and offerings, receiving, reporting and managing orders. Sourcing could be done in-house and/or through an external arrangement known as outsourcing. Outsourcing occurs when a company contracts another company to perform some of its peripheral functions for a specified length of time and cost.
