Submitted by: Greg Conder, PE
Buyers and purchasing agents often have to make the decision to use a single or multiple suppliers when purchasing precision machined or fabricated components and assemblies. There are pros and cons for each strategy.
Multiple suppliers offer more flexible capacity which could be helpful in reducing lead times and risk. Especially if your supplier is a small business, a spike in demand could overwhelm the supplier’s capacity and ability to deliver on time. There is also risk in the single supplier choosing to end the relationship (stop producing the components). In this case the buyer would quickly need to find another supplier.
Single supplier arrangements simplify supplier management simply because there are less suppliers to manage. Also, if your supplier is a small business, your orders will generally receive very focused and personal attention because your business is very important to the survival of the small business, especially if they know they are a single supplier.
Choosing a strategy is about reducing risk. Buyers and purchasing agents need their suppliers to be on time and deliver quality products at a competitive price.
For focused and personal attention, contact us at C&C Machine today.