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Single Sourcing vs. Sole Sourcing

Single sourcing enables logistical cost reductions as a result of a scaled-down supplier base (Burke et al., 2007).

Information about Single Sourcing vs. Sole Sourcing

In purchasing sole sourcing take place when only one supplier for the required item is available, whereas with single sourcing a particular supplier is purposefully chosen by the buying organisation, even when other suppliers are available (Larson and Kulchitsky, 1998; Van Weele, 2010).

Single sourcing decisions are usually made at strategic and top management level where purchasing and supply managers need to determine whether and how much value single source relationships add (Leenders et al., 2002). It is often opted for with the purpose of reducing material costs, as placing all purchasing requirements with only one supplier often makes it possible to negotiate better purchasing conditions. Some prerequisites of a single sourcing decision include prior commitments, successful past relationship, or an ongoing longterm relationship with a supplier. In addition, it can be justified when the supplier can offer unique or outstanding quality, the order is so small it is not worth dividing it, concentrating purchases lead to price/cost reductions, or the use of just-in-time is easier with a single supplier. The downside of this strategy is the increased dependence of the buyer on supplier. In addition, it is very difficult to balance the pros and cons of single sourcing (Van Weele, 2010). Being dependant on a supplier can impose a number of risks, for example, constant price increases, lowering level of quality or delivery, slowed down or continuous improvement programmes (Leenders et al., 2002). 

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