Sole Sourcing from the Vendor Side

Article

Treleven, Mark D.   (1986, ASQC)   University of Minnesota, Minneapolis, MN

40th Annual Quality Congress, May 1986, Anaheim, CA    Vol. 40    No. 0
QICID: 3241    May 1986    pp. 584-590
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Article Abstract

Sole sourcing is generally recognized as an important component of a quality system. This is especially true when a Just-in-Time system is involved.This paper will explore the vendor's reasons for, and against, entering into sole sourcing arrangements. Much has been written and said about sole sourcing's benefits to the vendee. However, the vendor's side of this quality "equation" is typically glossed over. Typical arguments for vendor involvement are factors such as obtaining a larger portion of the vendee's business, the stability of the long-term relationship, etc. If sole sourcing is to truly be a part of the "universal equation for excellence", it must contribute to the vendee and the vendor.Once a vendor has recognized the benefits that it can gain from entering into sole sourcing arrangements, must it sit back and wait for other vendees to express interest in this type of arrangement? This paper proposes that the answer to this question is a solid "NO". Once a firm has positioned itself so that it is a suitable sole source, oftentimes achieved by improving quality, it should take advantage of this distinctive competence. It should identify which of its customers would be good candidates for sole sourcing. Then the vnedor should initiate action to move toward such an arrangement. This must be done with careful consideration of other factors such as capacity limitations and impact on other customers. This distinctive competence is jsut one of the many "side benefits" obtained through quality improvement.

Keywords

Customer supplier relationships


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