Single Sourcing is defined by using only one supplier as a source of supply for a number of different, defined products.
Brief description
This sourcing strategy uses a single supplier for a specific palette of goods or services. Through this tactic, an attempt is made to get better prices or purchasing terms. In addition, communication, fulfillment and logistics efforts are reduced because Single Sourcing often uses master agreements.
A major disadvantage of Single Sourcing, however, is the dependence on a single supplier. By this, the risk of production stopping when supply difficulties arise is increased. A further point is the lack of flexibility in case of vagaries in demand.
