halfsourcing

Half-sourcing is a term used to describe a situation in sourcing where a buyer engages with only a portion of the potential suppliers for a given product or service, rather than conducting a comprehensive sourcing event that includes all or most available suppliers. This approach is often employed when a buyer has a good understanding of the market, has established relationships with certain suppliers, or needs to expedite the sourcing process.

The rationale behind half-sourcing can vary. It might be used to leverage existing supplier knowledge, reduce the administrative burden of managing a large number of bids, or to focus on suppliers that are already known to be competitive or innovative. In some cases, a company might half-source because they have specific requirements that only a subset of the market can meet, making it inefficient to engage with suppliers who are unlikely to qualify.

However, half-sourcing carries potential risks. By not engaging with the entire supplier market, a buyer may miss out on potentially better pricing, innovative solutions, or more capable suppliers. This limited scope can lead to a less competitive bidding environment and, consequently, suboptimal outcomes for the buyer. It can also inadvertently limit the buyer's market intelligence by not exposing them to the full spectrum of supplier capabilities and offerings. Therefore, the decision to half-source should be carefully considered, weighing the benefits of efficiency and focused engagement against the potential drawbacks of a narrowed market view.