Single Sourcing

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Single Sourcing is a method whereby a purchased part is supplied by only one supplier. Traditional manufacturers usually have at least two suppliers for each component part they purchase to ensure continuity of supply and (more so) to foster price competition between the suppliers. A just-in-time (JIT) manufacturer will frequently have only one supplier for a purchased part so that close relationships can be established with a smaller number of suppliers. These close strategic relationships (and mutual interdependence) foster high quality, reliability, short lead times, and cooperative action. Conversely, single sourcing can also lead to larger exposure to risk as opposed to a diversified sourcing portfolio if the single supplier is unable to produce the component in the desired quantity and time scales.


See Also

References

1. APICS Dictionary. "Single Sourcing."