This argument about not having to depend on a single source, well, there are industries where companies have to rely on a single source supplier; for example, certain specialty chemicals come only from China. At the height of the trade war, someone challenged us to find an alternate source of supply for the material they sourced from China. What about the truly immovable items that do not have alternate sources of supply?
The number of truly immovable items is actually pretty small. About 85 to 90 percent of items have alternate sources of supply.
Additionally, many companies buy goods and services that are more narrowly specified than required. Many times, they buy marketing features and benefits that do not translate into their customers’ requirements, effectively locking their category into single or sole sources of supply. Category management involves finding opportunities for value creation and risk reduction and creating choices that meet fundamental business requirements.
Read more about The Global Category Manager’s Handbook