What Is Involved in Sourcing Raw Materials?

Raw materials refer to those basic materials that are utilized by manufacturers and producers as the foundation for the production of their various goods and products. The exact types of raw materials required are dictated by the manufacturers' industry and the type of product that they are trying to produce. In that sense, the methods for sourcing raw materials are dependent on the exact type of raw material, the availability of such raw material, the dynamics of the relationship between the manufacturers and suppliers, and the level of demand for those materials. Other considerations may include the prices of the raw materials, the logistics of transporting them, and the distance of such materials from the manufacturers. Companies must also apply ethical considerations when sourcing raw materials, meaning that they must include considerations about the environment and sources of procurement.

An example of a situation where a company must involve ethics while sourcing raw materials can be seen in the jewelry market where most people are against the exploitation and violence inherent in the acquisition of some precious stones. In such a situation, the company in question would have to look for sources of procuring raw precious stones that do not involve the shedding of blood or the oppression of any group of people. Ethical considerations in sourcing raw materials can also be seen in the case of the use of different types of animal skin and fur in the production of various items. For example, a considerable number of people are appalled at the thought of fur farms where animals are exclusively raised for their fur, or other types of breeding sites where creatures may be raised for their leather or skin. The issue of sourcing raw materials for the companies that produce such items may be a very delicate one since the issue here is really the raw material itself, regardless of the source.

Availability may also be a factor when manufacturers are sourcing raw materials due to the fact that an abundance of raw materials means they can easily procure the needed items, but any form of scarcity will not only drive up the price, it will also put too much power in the hands of the suppliers. An example of such a situation is the availability of crude oil, a raw material that is only naturally available in a handful of nations in the world. Any type of crisis in one of the major supplying countries automatically drives up the price of the raw material in the other countries due to the increase in demand.