Certified Supply Chain Professional (CSCP) Practice Exam

What is a benefit of having multiple suppliers in a supply chain?

1. Increased cost control

2. Less dependency on single sources

3. Simplification of the supply process

4. Reduced time to market

The correct answer is: Less dependency on single sources

Having multiple suppliers in a supply chain offers the significant benefit of less dependency on single sources. When a company relies on one supplier for its materials or products, it faces a higher risk if that supplier encounters issues such as delays, quality problems, or financial instability. By diversifying the supplier base, a company can mitigate these risks and ensure a more stable supply of goods. This strategy provides flexibility, enabling a business to switch between suppliers if one is unable to meet demand or quality standards. Furthermore, multiple suppliers can foster competitive pricing and innovation as they vie for business, enhancing overall supply chain resilience. This diversity not only helps in smooth operations but also supports better negotiation leverage with suppliers. While options like increased cost control and reduced time to market may seem relevant, they do not specifically address the critical aspect of risk management and strategic operational flexibility that comes from having multiple sources. Simplification of the supply process may also be counterproductive, as engaging with multiple suppliers can introduce complexity, requiring careful coordination and management to optimize the supply chain effectively.