What is dual sourcing and why use it?

• A. Sourcing from a single supplier to minimize complexity.
• B. Sourcing from two suppliers to reduce disruption risk and improve resilience.
• C. Outsourcing logistics to third-party providers.
• D. Producing in two different countries for tax benefits.

Answer: (B)

Dual sourcing means sourcing the same material from two suppliers. The reason to use it is to reduce disruption risk and improve resilience: if one supplier faces a shutdown, quality issue, or logistics delay, you can continue receiving material from the other, helping keep production and delivery on track. It also introduces competition between suppliers and can improve negotiating leverage and responsiveness. Of course, it requires more coordination and may raise costs, but the payoff is a steadier, more reliable supply. The other ideas describe scenarios that don’t focus on risk mitigation of supplier failures—the single-source approach increases risk, outsourcing logistics is about moving logistics work rather than sourcing, and producing in two countries for tax benefits is about footprint rather than supplier continuity.