Answer to Question #272918 in English for tee

Question

Bose is moving toward single sourcing many of its purchased part requirements. Discuss why the company might want to do this. Are there any risks to that approach?

Answer 1

Benefits of single sourcing

Administrative efficiency_ there are fewer telephone calls to make and suppliers to visit

Lower inventory cost- need for incoming quality inspection can be minimized

Improved quality product- the firm can work with the supplier to improve the quality of the suppliers' products

Access to new technology_ manufacturer will be willing to share new technology

Risks of single sourcing

Increased vulnerability of supply

Increased risk of supply interruption

Greater dependency between your business and the supplier