The case for a second source is easy: a fire, a strike, a container that misses a sailing. The case against is the inventory, the qualification and the inconsistency that creeps in when two suppliers interpret one specification. Both are real, and the resolution is a split that is planned rather than accidental.
One specification, two approvals
The specification should be written so that it can be met by more than one manufacturer. That means performance parameters and test methods, not a part number from one catalogue. If the specification can only be met by one supplier, you do not have dual sourcing; you have a second logo on the same product.
Then qualify the alternate against the same tests, on the same equipment, with the same acceptance criteria. The qualification file should be directly comparable, otherwise the first deviation will start an argument about method rather than cause.
Split ratios that make sense
An 80/20 split is common because it keeps the primary supplier economically interested while giving the alternate enough volume to stay familiar with the product. A 95/5 split often fails: the alternate never runs enough volume to hold the specification, and the first emergency order arrives at a supplier who has not made the item in a year.
Set the ratio by line, not by site. If one line is critical, it may need its own primary and alternate rather than inheriting the site average.
Inventory without duplication
Two suppliers do not require two safety stocks. They require one safety stock, held in a form that can be topped up from either source. In practice: keep the safety stock in the primary supplier's pack, and hold a conversion approval for the alternate pack so it can be issued without a line trial.
The qualification cost is the real duplication. Budget for an annual re-qualification of the alternate, even if no volume was purchased, so the approval does not lapse silently.
| Item | Primary | Alternate |
|---|---|---|
| Share of volume | 70–80% | 20–30% |
| Safety stock | Held once, primary pack | Released on notification |
| Qualification | Full, on change | Full initially, annual review |
| Documentation | Lot CoA | Lot CoA plus equivalence file |
Contract terms that do the work
Ask for a capacity reservation rather than a promise. A supplier who can state the monthly capacity reserved for your account, and the notice required to change it, is giving you something you can plan against. Ask also for a notification window on raw material changes: 30 days is common, 90 days is better for a sterile reference.
Finally, agree what happens if the primary fails. A pre-agreed activation clause, with a defined volume and lead time, turns the alternate from a name in a file into a plan.
A simple scorecard
Score each supplier on four things: capacity headroom, notification window, documentation quality and lead-time variability. A supplier with 20% headroom and a 30-day notification window is a better alternate than one with a lower price and no reserve.
Review the scorecard once a year with the quality team. The point is not to rank suppliers but to know which one you would call first, and whether the answer has changed since the last review.
Is dual sourcing worth it for low-volume items?
Usually not. The qualification cost exceeds the risk for a reference that is used a few boxes a year. Focus the effort on items where a stock-out stops a line.
Can the alternate be a different construction?
Only if the qualification shows equivalence on the parameters that matter. A different construction is a different product, and the file has to demonstrate that the difference does not change the result.
How often should the alternate be ordered?
Often enough to keep the approval current: at least one lot per year, and a full re-qualification on any change at either supplier.
