Magazine Article | March 8, 2017

Do You Use Dual Sourcing To Improve Security Of Purchased Materials Supply?

Source: Life Science Leader

A: THE SIMPLE ANSWER IS “it depends.” Our approach considers three main factors: (1) patient impact (i.e., is this a life-saving product, and is there an alternative available?), (2) business impact (i.e., risk to reputation and product revenue), and (3) raw material time-to-replacement. By applying these factors to all our products, we can identify our most critical products and their associated raw materials and develop an appropriate strategy for continuity of supply.

For sole-sourced critical materials (only one source exists), our continuity strategy is likely limited to holding additional inventory and/or qualifying another site for the current supplier. For single-sourced critical materials (only one source qualified), protection strategy options include dual-sourcing, alternate site with existing supplier, or inventory. Sub-tier visibility is important in determining single-source risk at the sub-tier level.

Anu is VP & chief procurement officer, enterprise supply chain for Johnson & Johnson, and is responsible for developing and executing supplier and spend-management strategies.