A Dual Sourcing Strategy involves procuring the same product or material from two different suppliers instead of relying on a single source. This approach reduces supply chain risk, enhances negotiation power, and increases flexibility in response to market disruptions, geopolitical issues, or supplier performance problems. In inventory optimization, dual sourcing helps ensure a stable flow of critical materials and reduces the lead time variability associated with single sourcing. By diversifying supply risk, companies can avoid stockouts caused by disruptions like factory shutdowns, raw material shortages, or transportation delays. It also fosters competitive pricing and prevents dependency on a single vendor. However, dual sourcing adds complexity in terms of quality assurance, logistics coordination, and supplier relationship management. For successful implementation, companies must develop robust supplier evaluation systems and build digital infrastructure to monitor performance across both sources. Dual sourcing is especially vital in sectors like automotive, electronics, and pharmaceuticals, where uninterrupted supply is essential.
