A term describing a situation where a product, service, or component originates from or is provided by only one entity or supplier. This contrasts with scenarios involving multiple vendors or sources. single-source arrangements can impact efficiency, cost, and risk management. Considerations include the reliability and stability of the single provider, potential vulnerability to supply chain disruptions, and the lack of competitive pricing pressures. The nature of the product or service is also a factor, as some offerings are inherently limited to a single source due to technological, proprietary, or regulatory constraints.
Single-source meaning with examples
- The company opted for a single-source provider for its cloud infrastructure, simplifying management but increasing its reliance on that vendor's uptime and service levels. They carefully vetted the provider's security protocols and disaster recovery plans to mitigate potential risks.
- For critical components in the aerospace industry, single-source suppliers are sometimes necessary due to stringent specifications. This necessitates rigorous quality control and comprehensive long-term contracts to ensure component availability and performance reliability.
- Due to the proprietary nature of the software, the organization had no choice but to use a single-source vendor. This gave the vendor complete control over pricing and development, highlighting the need to carefully negotiate the contract.
- After experiencing quality control issues with several vendors, the production team consolidated its requirements to one single-source supplier. This was done to streamline the supply chain and improve product consistency, despite the inherent risks of the approach.