Scenario: five suppliers down to two
Consolidate a category for price and simplicity — and manage the concentration risk it creates.
Five suppliers for one category down to two: the savings, the concentration risk, and the transition that protects supply.
A single category — industrial packaging — is spread across five suppliers, a legacy of nobody ever rationalising it. The spend is real, the prices vary wildly, and the volume is scattered too thin to earn anyone's best rate.
The starting position
The case for two
Consolidating the €2.3M onto the two strongest suppliers concentrates volume, earns a better rate, and cuts the management overhead — but it trades diversification for buying power, so you keep two, not one.
The transition plan
- Award with a ramp. Split 60/40 across the two winners so neither becomes a single point of failure.
- Qualify before you switch. Trial orders and first-article inspection before volume moves — no supply gap during the handover.
- Exit the three cleanly. Run down existing POs, settle tooling, and keep one as a qualified fallback rather than burning the bridge.
Two suppliers, not one, is the point: you capture €256k of consolidation savings while keeping a second source that stops the saving becoming a hostage situation.
Modelling the savings and the risk trade-off side by side is what SourceWright is built for.
It's in the works.
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