I hope that you have enjoyed the article “Dual Source vs. Single Source.”
Being in the profession so many years, I’ve seen preferences for dual sourcing vs. single sourcing go back and forth like a pendulum. In my college purchasing class, dual sourcing was introduced as a “Japanese purchasing technique” that was made to seem so cutting edge at the time. The constant post-award competition would keep the primary supplier on its toes and the “carrot” of becoming the primary supplier (and doubling its business) would keep the secondary supplier working hard.
Then, in the late ’90’s, all the talk was about doing business with a single source to leverage volume for lower cost and “partnering” with your suppliers.
After Hurricane Katrina, everyone got on the dual source bandwagon again.
The dual source vs. single source argument reminds me of another “war story” from years ago. I’ll use “ABC Company” as the supplier name to keep it anonymous.
I was working on a procurement project that represented perhaps the biggest service procurement in the history of a particular industry. We had an intense meeting at the headquarters boardroom with the VP of Purchasing, my manager, and me – my title was “Purchasing Representative” at the time (kind of a senior buyer).
My VP and I felt strongly that, due to the amount of supplier capacity we were going to chew up, we should dual source. My manager disagreed. My VP and I said that with two suppliers there would be less risk. My manager became quite impassioned and said “If something went wrong, I’m sure ABC Company would be there for us in a heartbeat!”
That shut us up.
She was right.
So we single sourced.
And we never had to get ABC Company to bail us out of a jam.
So what does Charles recommend as far as dual sourcing vs. single sourcing?
I recommend evaluating each major procurement on a case-by-case basis and deciding what is best for that particular situation.
I think it is absolutely foolish when I see dual sourcing or single sourcing being adopted as the trend du jour.