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Elucidate the merits and demerits of single source and dual source suppliers for the global niche market?

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Question added by Mohammed Ashraf , Director of International Business , Saqr Al-Khayala Group
Date Posted: 2016/02/29
Ahmad Alhusainy
by Ahmad Alhusainy , Customer Service , National Bank Of Kuwait - Nbk

Single supplier has the upper hand over pricing, however two suppliers can be bit more competitive between them, the more suppliers the less power they have on you. which in relation to porter five forces when analyzing the company position in market place.

 

Faizan Ahmad
by Faizan Ahmad , Regional Head - Digital Sales , Kasturi and Sons Ltd (The Hindu Group)

Single sourcing

The customer chooses a single supplier to provide the entire set of services that it wishes to outsource, and relies on that supplier to carry responsibility for the outsourced services throughout the contract term. In this model, the customer looks to the supplier for all matters related to the outsourcing agreement, and the supplier is solely responsible for meeting the service obligations under this agreement. 

Merits:

Meet its aspirations, expectations and objectives. Deliver the particular set of services in a competitive manner. Create cost savings, value for money and innovation

 Dual sourcing

In Dual-sourcing, the customer enters into separate, parallel agreements with two suppliers for different parts of the services to be outsourced. 

Merits:

Competition between two suppliers

Reliability 

New Product : Dual sourcing is very useful for new products. New products may undergo several changes and updates in the beginning of its product life cycle. These changes can be made without completely disrupting the supply chain. While one supplier is being updated the other can continue supplying to keep the supply chain full.

 

Technological products often require more frequent updates as technology changes very rapidly.

 

I apologized for the answer I do not know the answer Leave for professionals

Deleted user
by Deleted user

if you're in the position of being a single supplier or sharing a demand with only another supplier, it is a perfect place, but if you are the customer or the business that only have limited suppliers it is not really good. The cons of only having one supplier are a lot, for instance: 

1- price control 

2. supply control 

3- discontinued operations of that supplier

4- lack of competition

and the list goes on and on

 

Emad Mohammed said abdalla
by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

I fully agree with the answers been added by EXPERTS...............Thanks.

Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

: Ahmed Alhussaini   has a good answer above 

Sidrah Nadeem
by Sidrah Nadeem , Global Marketing Manager , Hill & Knowlton

I have the same viewpoint as Ahmed Alhussaini on this one!

ACHMAD SURJANI
by ACHMAD SURJANI , General Manager Operations , Sinar Jaya Group Ltd

Having said how valuable and important a supplier can be to you, I'll now say that you should not be a patsy. You can be a demanding customer--just be fair. State your quality and time needs clearly. Hold your suppliers to their agreements. Make sure they stay competitive. Tell them you never expect to pay higher prices than other purchasers.

There are times you need to replace a supplier because you have outgrown them and they can't perform to your new expectations. Before dropping them, however, you might try to help them change to keep up with you.

It's not prudent to rely on one supplier. If that supplier has a strike or a fire, you don't want to be in a position where you'd be shut down too. So keep a second or multiple suppliers on hand, and don't be embarrassed to tell your key supplier that you're doing so. They will appreciate your honesty. If your supplier is savvy, they'll also know that you need backup suppliers on key products and services if you ever plan on raising money (lenders are sure to ask that question).

د Waleed
by د Waleed , Management - Leadership-Business Administration-HR&Training-Customer Service/Retention -Call Center , Multi Companies Categories: Auditing -Trade -Customer service -HR-IT&Internet -Training&Consultation

Thank You Mr Muhammed for the invitation .. I would agree with answers.. Variety of correct info and opinions ... Not much top add !

Rami Abbas
by Rami Abbas , Sales Manager , Al Houda Contracting and Real Estate Development

I agree with Mr. Ahmed Alhussaini answer.

Gourab Mitra
by Gourab Mitra , Manager IT Project Program and Delivery Management(Full Time Contract/Consulting Role) , IXTEL(ixtel.com)

The clear answer might be monopoly v/s balancing out

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