Multi-sourcing uses more than two suppliers for a category, requirement or service. It can improve coverage and competitive tension, but it also increases coordination and governance work.
How Multi-Sourcing works in a sourcing process
Segment the requirement so suppliers know what they are competing for and what may be awarded elsewhere. Avoid splitting volumes below economical production or freight levels.
| Area | What to record |
|---|---|
| Decision | Segment the requirement so suppliers know what they are competing for and what may be awarded elsewhere. Avoid splitting volumes below economical production or freight levels. |
| Evidence | Maintain an approved supplier list, allocation logic, comparable performance measures and consolidated demand view. |
| Watch point | More suppliers can reduce dependency while weakening volume leverage. The right number depends on market concentration, switching cost and operational capacity. |
What buyers should verify
Maintain an approved supplier list, allocation logic, comparable performance measures and consolidated demand view.
More suppliers can reduce dependency while weakening volume leverage. The right number depends on market concentration, switching cost and operational capacity.
