“Manufacturing sourcing decisions: Single versus Multiple Sourcing”

Abstract

This thesis addresses sourcing issues in the manufacturing industry. With the guidance of a truck manufacturer, the researcher looks into how manufacturers make their sourcing decisions, with the ultimate goal to find out differences, similarities, advantages and disadvantages with single and multiple sourcing. In few words, this research tries to understand better in which situations single sourcing is more appropriate than multiple, and vice versa, in the context of a manufacturing company. A qualitative method of analysis was chosen for this case study, under which published related literature, as secondary data, and interviews with professional buyers, as primary data, were used to shed light on the single versus multiple sourcing dilemma. Specifically, to collect the primary data, the researcher interviewed buyers from both the truck manufacturer that initiated this research and from other manufacturing companies. It was found out that sourcing is a lengthy procedure, and that sourcing strategies must consider product and market characteristics, geography, and the particular circumstances under which a sourcing decision is taken. The final suggestion for the truck manufacturer is to incorporate multiple sourcing to a greater degree into their purchasing routines. The significance of this research lies primarily in the fact that it presents the main characteristics of the two approaches, and as such, it provides information, which can give clarifications to the truck manufacturer that initiated it. Other than that, it has potential use to any company investigating whether single or multiple sourcing is more appropriate for them.