The Procurement Glossary » Dual Sourcing

Dual Sourcing

Sourcing & RFx

Definition

Deliberately using two suppliers for the same item to reduce dependency and supply risk.

Explanation

Dual (or multi) sourcing trades a little volume leverage for resilience: if one supplier fails, the other covers demand. It is a core supply-risk control for critical items, balanced against the simplicity and pricing of single sourcing.

Example

After a factory fire disrupted its sole supplier, the firm dual-sources its key component across two regions.

Related terms

• Single Sourcing — Choosing to buy an item from one supplier even though alternatives exist, usually to gain volume leverage or a deeper partnership.
• Supply Risk — The risk that supply of a good or service is disrupted, constrained or made more costly.
• Supplier Consolidation — Reducing the number of suppliers in a category by concentrating spend with fewer, better-managed vendors.
• Business Continuity Planning (BCP) — Planning to keep critical operations running, or recover them quickly, when disruption strikes.

Frequently Asked Questions

What is Dual Sourcing?

Deliberately using two suppliers for the same item to reduce dependency and supply risk. Dual (or multi) sourcing trades a little volume leverage for resilience: if one supplier fails, the other covers demand. It is a core supply-risk control for critical items, balanced against the simplicity and pricing of single sourcing.

Can you give an example of Dual Sourcing?

After a factory fire disrupted its sole supplier, the firm dual-sources its key component across two regions.

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