Sourcing/Contracting Strategy Selection

Abstract

The strategy combination of single sourcing and long‐term contracts is rapidly becoming the norm in progressive purchasing functions. The implications of this radical development is examined by disentangling the advantages and disadvantages of the separate strategies before recombining them to provide a generally applicable sourcing/contracting decision‐making model. The conclusions indicate that, contrary to current practice, large, powerful purchasing functions should avoid the use of single sourcing and long‐term contracts.

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