ABSTRACT
Advantages and limitations to customer and supplier of multi-sourcing short-term supplier relationships compared with near single sourcing long-term supplier relationships. The history of Western supplier/customer relationships is riddled with anecdotes in which all kinds of bad practice have been used to fool the customer into accepting products and materials that are not of the quality requested. Different organisations who use forms of preferred supplier status have a variety of self-developed rating systems. To reduce the cost of insurance, either in-house or by a third party, the customer may develop risk-tolerant work packages. Risk reduction resources are generally provided in the form of inspection, expediting or auditing services, but may also include risk management planning resources. Most of companies today outsource more than 60% of the work content of their products and services and the trend is towards higher and higher levels with the possible consequence of greater supplier dependency.
