Strategic Supply Chain Management Practice Exam

Which of the following best defines the sourcing driver in supply chain management?

1. Selection of supply chain managers

2. Choice of who performs supply chain activities

3. Determination of customer needs

4. Allocation of resources across the supply chain

The correct answer is: Choice of who performs supply chain activities

The sourcing driver in supply chain management primarily pertains to the choice of who performs supply chain activities, which is indeed represented by your selected option. Sourcing involves the procurement process and establishing relationships with suppliers, determining whether activities will be handled internally or outsourced to a third-party provider. This decision is vital as it impacts cost structures, quality control, and overall supply chain efficiency. Effective sourcing strategies can lead to competitive advantages, such as reduced costs and improved service levels, by ensuring that the right suppliers are selected for the right materials or services. This process includes evaluating potential suppliers, negotiating contracts, and deciding on the method of delivery, all of which directly affect the performance of the supply chain. Understanding sourcing as a driver highlights its essential role in shaping how resources are acquired and managed, influencing the wider operational strategy of the entire supply chain network. Therefore, the focus on who will fulfill these activities is crucial in strategic supply chain planning.