Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Six Sourcing Strategies

1. LO 11.2 Identify six sourcing strategies

Having decided what to outsource, managers have six strategies to consider.

Many Suppliers

With the many-suppliers strategy, a supplier responds to the demands and specifications of a “request for quotation,” with the order usually going to the low bidder. This is a common strategy when products are commodities. This strategy plays one supplier against another and places the burden of meeting the buyer’s demands on the supplier. Suppliers aggressively compete with one another. This approach holds the supplier responsible for maintaining the necessary technology, expertise, and forecasting abilities, as well as cost, quality, and delivery competencies. Long-term “partnering” ...