Multi-Sourcing Definition

Multi-sourcing is the practice of sourcing from multiple suppliers in order to reduce dependency on any one supplier and improve resilience to supply disruptions.

A multi-sourced supply chain is one in which goods or services are sourced from multiple suppliers, with the intention of reducing dependency on any one supplier and improving resilience to supply disruptions. The term is often used in the context of sourcing raw materials or components, but can also apply to other types of supplies and services.

There are several reasons why a company might choose to implement a multi-sourced strategy:

* To reduce the risk of dependence on any one supplier, which could lead to disruption of the company’s operations if that supplier experiences problems.

* To improve the chances of being able to find alternative suppliers if one supplier experiences problems.

* To encourage competition among suppliers, which can lead to lower prices and/or better quality goods and services.

* To hedge against fluctuations in prices for raw materials or other supplies.

Multi-sourcing can be contrasted with single sourcing, whereby goods or services are sourced from a single supplier. While single sourcing may be simpler and less expensive in the short term, it can create significant risks for a company if that supplier experiences problems.