The document discusses single sourcing and the transition from multiple sources to a single source for procurement. It outlines some hindrances of single sourcing like corruption risks, reliance on one supplier, and the need for supplier development. Characteristics of an effective single source include motivation, flexibility, innovation capabilities, cost reduction over time. The document then describes analyzing a company's product portfolio to determine sourcing strategies and selecting suppliers based on objective criteria like leveraged contracts and quality/delivery requirements rather than just price.

1. Approach and implementation of single sourcing Abhirup Das (09BM8002) Debesh Majumdar (09BM8016) Devdut Saha (09BM8083) Sujeeth Ungratwar (09BM8097) VGSoM, IIT Kharagpur

2. Contents Hindrances Characteristics of single source From multiple to single source

3. Hindrances May lead to corruption (govt. organizations) Requires large purchase volume High skill requirement of supplier Long time required for vendor development Total reliance on the supplier. Supplier setbacks can affect the purchaser

4. Characteristics of single source Motivated & committed Flexibility in production Innovation capabilities Should be capable of taking the manufacturing of other parts Should be able to reduce the cost of production continuously over time

5. From multiple source to single source Identification of materials to single source Identification of the vendors Present capability Future potential Vendor development Technical competitiveness Support to the vendor Emotional/handholding Information/know how Financial Technical Market

6. Identification of materials: Product Portfolios Portfolio analysis is used to develop sourcing strategy Considerations: Product complexity, supply market economic factors, image factors such as brand and safety

7. Analysis of Portfolios Purchase Category Features Routine Items More number of suppliers available Very short term supplier relationship Supplier Monitoring Simplification and automation of purchasing procedure Delegation of decision making power to lower level of management Bottleneck Items Monopolistic supplier market Long term supplier relationship Security of inventories Internally develop alternatives Contingency planning Delegation of decision making power to higher level of management Leverage Items More number of suppliers available Short term supplier relationship Exploitation of full purchasing power Delegation of decision making power to medium level of management Strategic Items Few suppliers are available Medium/ long term supplier relationship Detailed evaluation of suppliers Supplier development efforts Delegation of decision making power to top level of management

8. Selection Criteria for Single Sourcing Not-so-significant attributes: Product : Ease of operation Impact on energy utilization Cost of service contract Availability: Breadth of product line Geographic proximity Warranties Dependability: Ability to keep delivery promise Price : Low price *Adopted from “Preferences for Single Sourcing and Supplier Selection Criteria” by Cathy Owens Swift, GEORGIA SOUTHERN UNIVERSITY

9. Selection Criteria for Single Sourcing Selection criteria must fulfill objective business decisions (e.g. leveraged volume purchase contracts, standardization programs/systems, parts/service provided by an "original equipment manufacturer", consistency of quality/batch control, "just in time" delivery requirements etc). Another objective can be developing a "co-maker" relationship, or one in which the supplier is considered an upstream extension of the customer's business. Quality aspect(Deming’s 4 th point): "End the practice of awarding business on price tag alone. Instead, minimize total cost by working with a single supplier.” Single source selection based purely on personal preference or subjective rationale will not be sanctioned.