Most manufacturers depend on at least a few suppliers that they cannot easily replace. That is not always a problem. It becomes one when nobody knows which parts those are until a supplier misses a delivery and a line stops. This article explains how to find single-source parts, rank the risk and decide what to do about it.
Single-source and sole-source are different
It helps to separate two situations:
- Single-source: you buy a part from one supplier by choice, even though others could make it.
- Sole-source: only one supplier can make the part, perhaps because of a patent, a special process or a customer requirement.
Single-source risk can usually be reduced by qualifying another supplier. Sole-source risk usually needs a different response, such as extra safety stock, a long-term agreement or a design change.
Step 1: Build the list
Start with your purchasing history from your ERP. For each purchased part, find the number of suppliers you have actually bought from in the last twelve to twenty-four months. Do not rely on the approved supplier field alone; it often lists suppliers that have never been used. Parts with only one active supplier go on the list.
Step 2: Add the facts that matter
For each single-source part, add a few simple facts:
- Annual spend
- Which finished products use the part
- Supplier lead time
- Country of origin and any tariff exposure
- Current on-hand stock and safety stock
- Whether the part is sole-source or simply single-source
The bill of materials links parts to finished products, which shows how much of your revenue depends on each part.
Step 3: Score the risk
A simple score is enough. Rate each part from one to three on two questions:
- Impact: if this part stopped arriving, how much of production would stop?
- Likelihood: how likely is a disruption, considering lead time, supplier location, financial health, past delivery issues and trade exposure?
Multiply the two scores. Parts scoring six or nine need attention first. The scoring is a judgment, not a precise measure, so involve the buyers and planners who know the suppliers.
Step 4: Choose a response
For each high-risk part, pick one of these responses:
- Qualify a second source: the strongest response for single-source parts, though it takes time and testing. See our supplier diversification guide.
- Hold more buffer: raise safety stock to cover a realistic disruption. Our safety stock formula guide explains the math.
- Strengthen the relationship: agree on forecasts, capacity commitments or consignment stock with the supplier.
- Redesign: where possible, change the design to use a more widely available part.
- Accept and monitor: for low-impact parts, simply watch delivery performance and review the part each quarter.
Step 5: Keep the list current
The list goes out of date quickly. New parts are added, suppliers change and tariffs move. Review it at least quarterly, and add it to your S&OP meeting when supply risks are discussed.
Watch for stacked risks
The most dangerous parts often carry several risks at once: one supplier, a long lead time, imported content with tariff exposure and low on-hand stock. These stacked risks are easy to miss when each fact sits in a different system. Bringing them into one list is where most of the value comes from. Our article on reducing tariff exposure covers the trade side.
How we help
We build the single-source list from your ERP data, score it with your team and recommend a response for the highest-risk parts. Free call first, scope agreed before we start. For more on procurement risk, see our procurement and tariff guide.
Frequently asked questions
How many single-source parts is too many?
There is no universal number. What matters is how many high-impact parts depend on one supplier and how prepared you are if one fails. A short list of well-managed single-source parts can be perfectly acceptable.
Should we tell our supplier we are qualifying a second source?
Often, yes. Being open about wanting resilience can improve the conversation, and many suppliers understand the need. How you handle it depends on the relationship and your contracts.
Can we do this analysis without an ERP?
Yes. Purchase order history from accounting software or spreadsheets works too. It may take more cleanup, but the method is the same.
How long does it take to build the list?
For most plants, a first version can be built from existing data in days rather than weeks, depending on data quality.