What is the cost-benefit analysis of supplier diversification?

What is the cost-benefit analysis of supplier diversification?

Supplier diversification involves evaluating the costs and benefits of sourcing from multiple suppliers instead of relying on a single one.

What are the main benefits of diversifying suppliers?

The main benefits include reduced risk of supply chain disruptions, increased bargaining power, and access to a wider range of products.

What costs should I consider in this analysis?

Consider costs like increased management complexity, potential quality variations, and the expenses related to onboarding new suppliers.

How can I effectively implement supplier diversification?

Start by assessing your current suppliers, identifying potential new ones, and gradually integrating them into your supply chain.

What metrics should I use to measure the success of supplier diversification?

Key metrics include cost savings, supply chain resilience, quality consistency, and supplier performance ratings.