The document discusses the differences between multi-sourcing and single-sourcing in supply chains, highlighting the risks and financial implications of each approach. It cites case studies, including Ford's costly disruption due to a supplier's computer glitch and Ericsson's significant losses from relying solely on Philips for chip production following a fire. The conclusion emphasizes the importance of building a resilient supply chain to mitigate risks associated with disruptions.

1. Multi Sourcing vs Single SourcingSamarth Gulati91047Shefali Srivastava 91050

2. Problems in Supply Chain Disruptions: natural disasters, strikes, terrorism attacksUncertaintyVulnerabilityComplexity

3. What should be doneBuild a resilient supply chainPrepare the firm against disruptionrespond to uncertainty effectivelysecure the supply-chain

4. Multiple SourcingSingle Sourcing

5. HIGHSUPPLY RISKHIGHLOWLOWFINANCIAL IMPORTANCE

6. Need for Single Sourcing

7. Need for Multiple Sourcing

8. Multiple Sourcing vs Single SourcingMultiple SuppliersPRICEINDIRECT COSTSSingle SupplierPRICEINDIRECT COSTS

9. Ford Case In 1998, supply problems at Ford resulted in the temporary, three-day shutdown of the Fiesta and Puma manufacturing facilities in Cologne and Dagenham, Germany. The source of the supply problem was a computer glitch at Ford’s provider of door and trunk latches. Those three days cost Ford approximately £70 million in labour costs and the production of about 7000 vehicles.

10. Ericsson vs NokiaPhilips suffered a fire in its plant of Alburque in march 2000.Philips’s site became unable to produce the computer chips that its customers, Nokia and Ericson, needed to produce mobile phone handsets. Nokia realized very early that there was a problem in the production of chips, and pressured Philips to reroute capacity. Ericsson detected the problem slowly and when it turned to Philips, it was too late as Nokia had already claimed all the production. The damages were very important for Ericsson as Philips was its only supplier:Ericsson lost $1.8B, and almost 4% of market share to Nokia.

11. Conclusion