Sourcing

Sole, Multiple, and Single

Sourcing is the process of contracting suppliers to perform the required work, or to supply goods.

There are three types of sourcing:

• Sole
• Multiple,
• and Single.

Choosing between these types affects your strategic relation with your suppliers; sometimes is determined by the nature of the market, and is related to the type of product that you are trying to acquire.

Sole Sourcing

In solo sourcing, organization is forced to deal only with one supplier. Due to:

A- Monopoly: There is only one supplier in the market, like some utilities; water or electricity, or even telecom in some countries.

B- Patents: when the supplier holds patents on that service/product.

C- Technical Capabilities: When a supplier has distinguished technical capabilities that put him apart from other suppliers.

D- Service Location, and the cost of transportation.

Multiple Sourcing

In multiple sourcing, organization contracts multiple (two or more) suppliers to supply the same item/service.

As a result, suppliers are expected to compete and provide a better service or better price.

Single Sourcing

Single sourcing is a planned decision by an organization to select one supplier to provide a service (or an item), when several sources are available.

Single-sourcing aims to achieve several goals, like:

A- Long-term relationship with suppliers

B- Improve supply process

C- Consistent quality of service.