Is Single Source Procurement to Risky?
Today’s post is from Ronald D Southard, CEO at SafeSourcing Inc.
According to Wikipedia Globalization, is the process of interaction and integration among people, companies, and governments worldwide. Globalization has accelerated since the 18th century due to advances in transportation and communication technology. This increase in global interactions has caused a growth in international trade and the exchange of ideas, beliefs, and culture.
According to Bing, Single Source Procurement is procurement in which, although two or more vendors supply the same commodities or services, the customer selects one for substantial reasons, eliminating the competitive bidding process.
Doe this still provide adequate flexibility. This author does not think so.
This type of procurement has grown to include every industry on the planet. Think of Single Source Plumbing, Single Source Construction, Single Source Manufacturing amongst hundreds of others, let alone single sourcing of finished goods from wholesale and distribution companies. Companies that use this terminology in their naming conventions like above or in their marketing strategies in order to reinforce their messaging to targeted new customer acquisition may suffer long term by favoring of long-term single source relationships.
What seems like a solid strategy, combining single source and globalization stagiest are often difficult if not impossible to do. Ultimately becoming global reduces single source opportunity. Throw on top of that Acts of God like unforeseen weather issue or Pandemics like COVID may eliminate single source as a viable strategy and globalization as a reasonable business pursuit. Maybe the old statement of think Globally but act locally requires some new consideration
SafeSourcing is a SaaS procurement focused organization that can provide access to multiple sources of supply globally through our SafeSourceIt™ Supplier Database. This ensures that you get the best price the market has to offer in the location in which you need it every time by introducing the competition for your business that single source eliminates.
If you’d like to learn more as to how SafeSourcing can assist with your sourcing in your operating areas, please contact a SafeSourcing Customer Services Associate