Dual Sourcing
Definition
A sourcing strategy that splits an item's volume between two qualified suppliers to balance cost leverage against supply risk.
In Practice
Dual sourcing typically allocates volume asymmetrically, such as 70/30 or 80/20, so the primary supplier retains scale economics while the secondary stays warm: qualified, tooled, and shipping regularly. If the primary fails, the secondary can ramp up in weeks instead of the months a cold qualification would take. Splitting across different regions also hedges geographic risks like port closures, tariffs, and natural disasters.
The costs are real: duplicate tooling, duplicate qualification effort, potentially higher blended prices, and possible lot-to-lot variation between sources that quality teams must control. Dual sourcing therefore makes most sense for high-impact items, the strategic and bottleneck quadrants of the Kraljic Matrix, rather than everything.
Example: after pandemic disruptions, a bicycle manufacturer dual-sources derailleurs 75/25 between an Asian and a European supplier. When shipping delays hit the primary, the European source doubles output within three weeks and assembly lines keep running.
Related Terms
A deliberate strategy of buying an item from one supplier even though qualified alternatives exist, usually to maximize volume leverage and simplify management.
Multi-SourcingSpreading purchases of an item or category across three or more suppliers to maximize supply security and continuous competitive tension.
Kraljic MatrixA two-by-two portfolio model that classifies purchased items by profit impact and supply risk into strategic, bottleneck, leverage, and non-critical quadrants, each with its own sourcing approach.
Supplier QualificationThe formal process of verifying that a prospective supplier can reliably meet quality, capacity, financial, and compliance requirements before awarding them business.