A Winning Strategy Game Managing Strategic Source Diversification with SAP

Multi-Source Management

SAP Supply Chain Control Tower

What if We Could Use the Same Material Number Representing  the Component (or Finished Good), Regardless of Source? 

In these turbulent times, many organizations are making a strategic shift away from single-source environment for key materials and for good reason. A more diverse supply base means you are less dependent on any single source of supply. That leads to a more competitive marketplace and an increased possibility that we will be able to keep our customer promises, particularly when supply is constrained. When there is sufficient volume to be shared, multi-sourcing is a strong tool to have in the toolkit because knowing that there are options inherently places us in a better place to negotiate. And the recognition that there is volume on the table provides sources with incentives to strive for excellence.

However, multiple sources can also mean multiple headaches due to the complexity of efficiently executing the sourcing strategy that you’ve worked so hard to build. In fact, we’ve seen several customers this year who have tried using a unique material number per source with the goal of quickly providing a landing place for their new diversified supply base. Certainly, it is far from easy—the sharing of information, the slippery slope of adjusting inventories to make things easier for components used in the manufacturing run and the constant overall maintenance and upkeep. No one needs to add more headaches.


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