Can Single Sourcing Work in R&D?

Article

Osmond, Robert; Coleman, Garry D.   (1999, ASQ)   RWD Technologies, Columbia, MD; University of Tennessee Space Institute, Tullahoma, TN

Quality Progress    Vol. 32    No. 5
QICID: 13394    May 1999    pp. 37-43
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Article Abstract

Research and development (R&D) organizations can benefit from long-term relationships with single suppliers for material purchasing and especially for contract research. The principle of single sourcing is linked to the fourth of W. Edwards Deming's 14 points. It suggests that minimizing the supplier base for a given item has economic, innovative, and efficiency benefits. R&D organizations stand to benefit from single sourcing, whether it is applied to joint ventures, internal contracting, or external contracting. Advantages of single sourcing in contract research include: increased capacity; cost reduction; greater likelihood of supplier innovation; common standards development; and user-product orientation. The supplier benefits, too, by reductions in requalification and marketing expenses. Among the disadvantages are: time invested in start-up negotiations; administration of the project; internal political obstacles; and the difficulty of quantifying the benefits of single sourcing. When setting up a research contract, the R&D organization should analyze factors like: capability; project administration; price; personnel relationships with the supplier; and credibility of the supplier. Single sourcing can minimize potential problems like the division of intellectual property, while improving technology transfer. Single sourcing has been a good strategy in the ERP (enterprise requirements planning) software industry, where it supports development of software easily incorporated into other vendors' products.

Keywords

Deming, W. Edwards,Deming's 14 points,Product development,Research and development (R&D),Software,Outsourcing,Suppliers


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