You often hear advice such as diversify your supply chain and use multiple sources for components. Generally these are sound recommendations, especially for commonly available parts.

Managing multi-source components is straightforward. Like-for-like parts can be designated on the bill of material (BOM) as first source, second source and so on.

Using interchangeable parts also makes negotiating the price simpler as suppliers are competing for the business and will price accordingly.

However, every product will have certain components that cannot be multi-sourced and only obtained from one supplier – either by choice or circumstance.

These parts could include CPUs/processors, customised connectors or enclosures that require tooling, specialist raw materials and even proprietary code.

No matter how hard you try, it will be impossible to avoid having some single-source components in your BOM. So how do you manage the risks of using single-source parts?

Managing single-source parts is not straightforward. Deciding which supplier and part to use takes careful and deliberate thought. Negotiating the purchase price can also take time.

The more single-source parts you have, the greater the strain on the team to manage all these risks to avoid, as far as possible, a potentially catastrophic situation.

By concentrating single-source risks to the chosen few and taking the time and effort to build long-term partnerships with those part suppliers can significantly help reduce your risks down-stream.