What is a dual sourcing strategy?

A dual sourcing strategy involves utilizing two suppliers for the same product. This approach is implemented primarily to mitigate risks that are associated with relying on a single supplier. By engaging more than one supplier, an organization can enhance its supply chain resilience, ensuring that disruptions from one supplier—whether due to production issues, financial instability, or other unforeseen events—will not entirely halt access to the required product.

Leveraging two suppliers also introduces competition, which can result in better pricing and terms for the buyer. It provides flexibility and backup options, allowing the procurement team to buffer against unexpected changes in demand or supply disruptions. In situations where reliability and continuity of supply are critical, dual sourcing can be an effective method to stabilize production and meet customer needs.