Single-Source Supplier Dependency Risk Assessment
A single-source part is not automatically a problem, but a single-source part with no inventory, no tooling rights and a long requalification time is. This assessment scores that exposure for one supplier and part.
1. How many qualified suppliers can make this part today?
2. Who owns the tooling or the process know-how?
3. How long would it take to qualify a new source, including first article or PPAP?
4. How much safety stock or finished inventory do you hold?
5. How exposed is the supplier to one site or one region?
6. How would you rate the supplier's financial health?
7. What does a supply stop on this part do to your customer shipments?
8. Does the supplier depend on sole-source materials or sub-tier suppliers?
9. What does your supply agreement give you?
10. How do you monitor this supplier?
How to use the assessment
Pick one supplier and one part, or one family of near-identical parts, and answer the ten questions as the situation is today, not as you hope it will be. Use the score as a ranking tool across your critical parts, not as a precise measure. Start with parts that have long lead times, customer-approved sources or special processes, because those are where a stop hurts most. Run the same assessment for your top ten sole-source parts and compare.
- Assess one part or family at a time
- Answer with current facts
- Use the score to rank parts, not to prove safety
- Repeat after supplier or design changes
What the questions measure
The questions cover five areas: number of qualified sources, control of tooling and know-how, time and cost to switch, buffers such as inventory, and the supplier's own risk through location, finance and sub-tier chain. The final questions cover contract protection and monitoring. A low score in any one area is a cue to act on that area, even if the overall score looks acceptable.
Mitigation options
Mitigation ranges from cheap to costly. Cheap steps include a continuity clause, an updated forecast shared with the supplier and a map of sub-tier sources. Mid-cost steps include safety stock and a split award with a second source. Costly steps include buying tooling, redesigning for an alternate source or dual-qualifying a customer-approved part. Match the step to the cost of a supply stop, and ask your customer early if a source change needs their approval.
Common mistakes
Teams often count a supplier as dual sourced when the second source has never shipped a part, treat a distributor as a second source when it buys from the same manufacturer, or assume safety stock covers a requalification that takes longer than the stock. Another mistake is to review risk only after a failure. Put the assessment on the calendar for critical parts and keep results with the supplier file.
- A qualified source has shipped acceptable parts
- A distributor may share the same manufacturer
- Compare stock days to requalification time
- Review before a failure, not after
Frequently Asked Questions
What is the difference between single source and sole source?
Single source usually means you chose to buy from one supplier though others exist. Sole source means only one supplier can provide the item. Single source is a purchasing choice that can be changed, sole source is a market condition that needs other kinds of mitigation.
Is single sourcing always bad?
No. It can reduce cost, improve quality and strengthen supplier relationships. The risk comes from combining it with weak protection. A single-source supplier with a strong agreement, stock buffer and ownership of tooling can be a reasonable choice.
How many parts should I assess?
Start with the parts that would stop shipments fastest: long lead time, customer-approved sources, special processes and parts with no stock. A purchasing team can usually identify its top ten to twenty quickly from the item master and open orders.
What does the score not tell me?
The score is a structured opinion, not a prediction. It does not measure the probability that a specific supplier fails. Use it to compare parts and decide where to spend effort, and combine it with supplier performance and financial data.
If you want to find your sole-source parts automatically, we can build a read-only query on your ERP's approved vendor data and item master that lists them with stock cover and lead time.
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