In any business there are certain dependencies which may become, over time, a threat to the survival of the organization. A simple example is in the case of any source which has become your sole supplier for any product or service. Of course, the extent of the threat will vary in direct proportion to the significance of the role played by that sole supplier — your “default source.”
Several areas of exposure are cursorily described below:
1) Your supplier increases prices to your company for one or more reasons — perhaps he is feeling particularly powerful; perhaps his cost of producing the goods or rendering the service has increased, and he is passing this increase along to you; perhaps he has lost another one of his most important customers and is trying to cover the revenue loss by overcharging you – at worst, he may be trying to weaken your company to the point that you become an easier, more pliable takeover target;
2) Your supplier simply cannot produce timely enough in or in sufficient quantity to service your needs — this may endanger your company and can cause problems with some of your most important customers… what if your supplier’s business is failing? There is the chance that he can bring your company down with his;
3) Your supplier’s quality of production or of service is deteriorating, slowly, but surely.
If you have a dangerous interdependency, your fate may rest with that of your favorite supplier. And your supplier’s fate is not necessarily subject to your control or your needs. There are too many exogenous factors at play.
Having lived through this scenario on numerous client engagements, I would gently suggest to you that you always have several alternative sources of supply, and that you keep them “warm” by ordering from them on a ’round robin’ or some other equitably and sensibly excusable (plausible) basis. The only good exclusive source of supply is the one that you happen to own; and tha, by itself, if still no guarantee.
In words which bring to mind the late Johnny Cochran, attorney cum minimalist poet, “Diversify your source of supply.” Amen.
- Planning for infrastructure ‘interdependences’ key if networks to meet needs of 21st century, say experts (ice.org.uk)
- Collaboration and Interdependency, Anywhere (blogs.cisco.com)
- New World Order: ‘Declaration of Interdependence’ Issued in 1975 (truthstreammedia.com)
- Every day is Interdependence Day (blogs.scientificamerican.com)
- Panda, Penguin, Poodle And Google – Customer Service? No. Slavery? Yes! (douglasecastle.com)
- Rich Chinese Export Pollution to Poorer Regions (scientificamerican.com)
- Samsung will purportedly supply chips for 2015 iPhone (sammyhub.com)
- Apple Investigating Indonesian Tin Production for Illegal Mining (macrumors.com)
- Justice Is in Our Nature (blogs.scientificamerican.com)
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