Advantages and Disadvantages of Multiple Sourcing
Stefan Smith, Project Manager, Germany, Member
Advantages:
- 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.
Disadvantages:
- 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.
