Advantages and Disadvantages of Multiple Sourcing
Stefan Smith, Member
- Obviously, the competition between suppliers may lower the price.
- Also you are more flexible in changing the supplier in a case of unpredictable situations.
- On the other hand there is less risk for supplier to be concentrated on some special part of production, which would make him (the supplier) dependent on the purchases of buyers.
- There may be cost disadvantages due to the lower volume you purchase from one supllier
- Processing costs may be higher, as a result of an increase in the complexity of the processes and relationships to the suppliers.