Single Sourcing
Definition
A deliberate strategy of buying an item from one supplier even though qualified alternatives exist, usually to maximize volume leverage and simplify management.
In Practice
Single sourcing is a choice: the market offers multiple capable suppliers, but the buyer concentrates all volume with one to earn better pricing, deeper collaboration, and simpler quality control. It differs from sole sourcing, where only one supplier can supply the item at all.
The trade-off is risk concentration. A fire, strike, insolvency, or quality escape at the single source stops your supply completely, and switching takes however long requalification takes. That is why single-sourced items deserve extra safety stock, tight supplier monitoring, and a pre-identified backup that could be qualified quickly.
Example: a furniture maker single-sources its fabric from one mill, earning a 12 percent price advantage and dedicated capacity. When the mill floods, production halts for six weeks because no alternative is qualified. Afterward, the company keeps the single source but qualifies a second mill as a dormant backup.
Related Calculators
Related Terms
A situation where only one supplier is capable of providing an item or service, leaving the buyer with no practical alternative source.
Dual SourcingA sourcing strategy that splits an item's volume between two qualified suppliers to balance cost leverage against supply risk.
Multi-SourcingSpreading purchases of an item or category across three or more suppliers to maximize supply security and continuous competitive tension.
Supplier QualificationThe formal process of verifying that a prospective supplier can reliably meet quality, capacity, financial, and compliance requirements before awarding them business.