multiplesourcing

Multiplesourcing is a procurement strategy that deliberately engages more than one supplier to fulfill similar requirements. It applies to components, materials, services, or IT capabilities and can involve varying degrees of dependency among suppliers. The goal is to create a diversified and competitive supplier base to improve resilience, flexibility, and value.

By distributing spend and requirements across multiple vendors, organizations reduce the risk of supply disruption if a single supplier experiences problems. Multiplesourcing also strengthens bargaining power, fosters innovation through competition, and enables regional diversification or nearshoring.

Implementation typically begins with a thorough understanding of requirements and a landscape assessment of potential suppliers. A mix of core, preferred suppliers and contingency second sources is designed, with clear service level agreements, performance metrics, and contractual terms. Governance, data sharing, and supplier relationship management are critical to maintain alignment and ensure consistency across sources.

Challenges include higher coordination and administration costs, potential quality variation, and complexities around intellectual property and interoperability. Without careful governance, supplier rivalry can undermine collaboration. Successful practice relies on standardization, robust risk management, clear decision rights, and ongoing performance reviews to maintain coherence across multiple sources.

Occurrences in practice include manufacturing ecosystems with assembled components, information technology services with multiple managed service providers, and commodity procurement where price competition is important. Multiplesourcing is related to, but distinct from, dual sourcing and general vendor diversification, and it supports resilience, competitive sourcing, and supply chain flexibility.