What are the types of sourcing?

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SUPPLIER SOURCING

Three types of supplier sourcing are:
  1. Sole sourcing;
  2. Multiple sourcing; and
  3. Single sourcing.

1. Sole Sourcing

Sole sourcing is the use of only one supplier for the organisation. The organisation does not have any choice. It is forced to use only one supplier.
This forced situation is because of the following factors: patents, technical specifications, raw material location, only one organisation producing the item, etc.

2. Multiple Sourcing

Multiple sourcing is the use of two or more suppliers for an item.

The basic concept of multiple sourcing is that competition will result in better quality, lower costs, and better service. The selection of suppliers from various alternatives is based on their performance in terms of price, quality and delivery.

3. Single Sourcing

Single sourcing is the use of one supplier for an item when several sources are available.
It leads to long-term partnering relationship.
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