Does the word sourcing immediately make you think of a broker? Are you automatically filled with thoughts of the dreaded back-and-forth communication that comes with being stuck in the middle of a negotiation? Not all sourcing companies are brokers, though, and the key is learning how to tell the difference between the two.
What Does a Manufacturing Sourcing Company Do?
Sourcing manufacturing companies like Pilgrim Harp utilize factories all around the world to best meet the needs of each individual customer. They often operate as your point of contact, so you don’t have to bother with the hassle of working with the plant itself. As a strategic sourcing partner, they handle many elements of the process, including:
- Quoting
- Supplier qualification
- Quality control
- Warehousing
- Delivery
You get clear lines of communication from your contract manufacturing partner and are able to rest easy knowing that you’re in the hands of an experienced supplier. In fact, the factories used by Pilgrim Harp are qualified by our company for each specific project, and most are AS9120B and ISO 9001:2015 certified.
What Does a Broker Do?
As opposed to a strategic sourcing partner, a broker’s job is to match a customer to a factory based on the needs of the buyer and the capabilities of the manufacturer. After which, they pass the PO down the pipeline and their part of the process is complete. Once the broker has taken their margin of the profit, there is no longer anyone to monitor quality control, delivery times, or documentation.
Broker vs. Sourcing Partner
| Broker | Sourcing Partner | |
|---|---|---|
| Quoting | Factory quote is passed on | Quote is lined up against a qualified supplier set |
| Supplier qualification | The customer is responsible for any audits | Audits the factory for base qualifications |
| Quality control | Must be done at the customer’s receiving dock | Pilgrim Harp offers a quality control lab with CMM, optical vision, and functional gages |
| Documentation | Sent on if available from the factory | These are managed and held secure by the sourcing partner |
| Supply continuity | Typically only a single factory | Dual sourcing is an option for when volume needs are great |
| Inventory | The customer takes the brunt of the MOQ | Held in a secure warehouse and released per the customer’s specifications |
| Payment | The main deposit is required up front, and the balance is typically paid at shipment time | The sourcing partner fronts the factory cost and then the customer pays Net 30/60/90 |
Quality Infrastructure with Pilgrim Harp
When working with Pilgrim Harp as your strategic sourcing partner, you receive not only unmatched communication, but also infrastructure elements designed to protect you and your investment.
The Difference in Cost of Ownership
When you work with a strategic sourcing partner, the total cost of ownership required is significantly less than traditionally viewed. Many in the past have seen sourcing manufacturing companies as a premium, when in reality the tables have turned in regard to the economics of it.
With fewer vendors to manage, you can save on time utilized and allocate it toward tasks that further require your input. There’s also no incoming inspection and no MOQ capital sitting on your shelves taking up space, which means you improve productivity both on and off the floor.
Pilgrim Harp: Full-Service Sourcing and Manufacturing Solutions
No matter what your needs are, we have the capabilities to be your full-service sourcing and manufacturing partner. If you want to get started, Pilgrim Harp stands by ready to help. Request a quote today and we will be happy to assist you.