Single-source risk

A part, service or category with only one qualified supplier, or one supplier in actual use, so that a supplier's failure stops production or service.

DefinitionA part, service or category with only one qualified supplier, or one supplier in actual use, so that a supplier's failure stops production or service.

How it is found

From receipts and the supplier master: for each part, the number of qualified sources and the number actually used in the window. One of either is the exposure. Value it at the annual spend on the part, or at the cost of a month without it.

By site

Inbound share by supplier per site, with a threshold. A site taking a third of its inbound from one supplier is concentrated whether or not the parts are single-sourced.

Not the same as compliance

Compliance asks whether spend went where the contract said. Concentration asks what happens if the supplier stops. A fully compliant category can be entirely single-sourced.

How it is computed

Parts, services or categories with one qualified supplier, or one supplier in actual use, listed with annual spend, the sites affected and the time needed to qualify an alternative.

Example

Of 4,200 purchased parts, 610 have one qualified supplier. Forty of them would stop a production line within a week and take over six months to re-source.

Where it goes wrong

Counted by number of parts. The forty that matter are lost among hundreds that do not.

Articles that use this term

Board and management reporting · Supply chain

Ten questions a chief operating officer asks about supply and service, and the table that answers each

The ten questions a COO puts to the supply chain and service functions, which suppliers are deteriorating, where is single-source risk, what is the lead time really, where is inventory ageing, which sites are short and which are long, is the demand plan biased, what are we paying early for nothing, which accounts consume the most service, are we meeting the SLAs we signed, and what changed, each with the computed table, the identity behind it, and the answer a COO should send back.

16 Sept 20263 min read Procurement and supply chain · Procurement

Ten questions a chief procurement officer asks, and the table that answers each

The ten questions a CPO puts to the category managers, how much spend do we actually manage, where is off-contract buying coming from, did the savings reach the ledger, how many suppliers are in the tail and which to keep, are we paying to terms, where is single-source risk, which suppliers are slipping, is the contract price being applied, which contracts expire when, and what changed, each with the computed table from the payables ledger and the contract register, the identity behind it, and the answer a CPO should not accept.

16 Sept 20263 min read