Do your procurement teams frequently face logistical delays, rising costs, or supplier-related disruptions? These bottlenecks often result from fragmented supplier strategies, making it difficult to maintain consistency in quality and delivery.
Singapore’s economy loses an estimated S$2.6 billion annually due to supply chain disruptions, with issues like port congestion and logistical bottlenecks both contributing to the economic impact. This highlights the urgent need for streamlined sourcing approaches that can improve resilience.
Single sourcing offers one viable solution by fostering closer partnerships with a trusted supplier and consolidating procurement processes. When executed effectively, this strategy can enhance vendor reliability, reduce administrative complexity, and lower operational risk.
Many businesses in Singapore have embraced this approach and experienced improvements in supplier performance and supply chain agility. Curious how single sourcing differs from sole sourcing, and which is better suited to your needs? Keep reading to uncover key insights and comparisons.
Key Takeaways
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Table of Content:
Table of Content
What is Single Sourcing?
Single sourcing refers to a procurement strategy where a company selects one supplier to fulfill all its needs for a specific product, material, or service, even when other suppliers are available. This approach is often chosen to streamline operations, improve consistency, and potentially reduce overall costs.
Rather than sourcing from multiple vendors, businesses conduct a thorough evaluation process to identify the most suitable supplier. While cost is an important factor, the decision typically involves additional considerations such as delivery reliability, contract flexibility, product quality, and supplier expertise.
In practice, single sourcing extends beyond product-based procurement. A tech company, for instance, may rely on one commercial cleaning agency to service its entire office space regularly. By working with a single provider, the business simplifies vendor coordination while ensuring consistent service delivery.
What is Sole Sourcing?
Sole sourcing is a procurement approach where a business relies on only one supplier to provide a particular product or service, not by choice, but due to necessity. This situation typically arises when only one supplier in the market is capable of meeting the business’s specific needs.
Moreover, sole sourcing may reduce price competitiveness and slow innovation, especially if the supplier becomes complacent. Without competing vendors to challenge them, the drive to improve quality, service, or pricing may diminish over time.
While this approach can simplify supplier management, it also brings significant risks. If the sole supplier encounters issues such as production delays, quality control problems, or financial instability, the entire supply chain could be affected. This lack of alternatives increases vulnerability and limits negotiation power.
What are the Benefits of Single Sourcing?
Single sourcing offers strategic advantages that can significantly improve procurement, efficiency, and supplier relationships. Here’s how businesses can benefit from this approach:
1. Stronger supplier partnerships
Relying on a single supplier encourages deeper collaboration and trust. Over time, this can lead to better service levels, more responsive support, and improved flexibility in meeting shifting business needs.
2. Simplified procurement and administration
By simplifying supplier management and reducing the number of vendors involved, single sourcing can significantly improve your product sourcing strategy. It allows businesses to focus their efforts on developing stronger supplier partnerships, leading to greater consistency and efficiency.
3. Greater consistency and faster resolution
Having one supplier helps standardise product quality and service performance. It also simplifies problem-solving, as issues are easier to trace and resolve without coordinating across multiple sources.
4. More negotiation power and cost savings
Consolidated purchasing gives businesses greater leverage when negotiating pricing and payment terms. In many cases, this leads to lower unit costs, reduced shipping fees, and more favourable contractual conditions.
5. Competitive and operational advantages
Streamlined operations allow for faster decision-making and shorter lead times. In fast-paced industries, this agility provides a competitive edge, especially when supplier reliability directly impacts delivery or service timelines.
6. Potential for long-term collaboration
A strong single-source relationship may evolve into strategic partnerships, where suppliers provide added value such as co-branding, customisation, or innovation support. These collaborations can elevate market presence and boost profitability.
These advantages make single sourcing valuable for companies aiming to streamline procurement, maintain supplier relationships, and ensure quality. HashMicro offers a procurement solution that simplifies sourcing and aligns with your goals. Click below for pricing, and Singapore businesses can get up to 70% funding through the CTC Grant.
Single Sourcing vs Sole Sourcing
Choosing between single sourcing and sole sourcing can shape how a company manages supplier relationships and procurement risks. While both involve working with one supplier, the differences lie in control, flexibility, and how much influence the buyer holds over the terms.
| Single Sourcing | Sole Sourcing |
| Buyer controls supplier selection and negotiates terms | Supplier has control due to lack of available alternatives |
| Easy to switch suppliers if performance declines | Switching is difficult or impossible |
| Lower risk due to availability of alternative suppliers | Higher risk due to full dependency on one source |
| Prices and service levels can be negotiated and improved over time | Terms are often dictated by the supplier, with limited room for negotiation |
| Chosen for long-term efficiency, quality, and strategic advantage | Used when the supplier provides exclusive goods, services, or proprietary assets |
Single sourcing allows businesses to establish consistent supplier collaboration while retaining the flexibility to pivot if performance expectations aren’t met. This flexibility keeps costs under control and ensures quality doesn’t suffer over time.
On the other hand, sole sourcing can place businesses in a more vulnerable position. Without alternative suppliers, the company may face inflated costs, inconsistent quality, or delays if the supplier underperforms or fails to deliver altogether.
Therefore, the choice between these two sourcing strategies depends on your business goals, product complexity, and industry dynamics. A well-informed decision can enhance operational resilience while maintaining control over procurement outcomes.
Single Sourcing Examples
Single sourcing can apply across many industries, especially when businesses prioritise consistency, cost-efficiency, or specialised supplier relationships. Below are several real-world examples that show how different sectors adopt this strategy:
1. Organic restaurants sourcing sustainable meat
A restaurant focused on organic and ethically sourced food may choose a single supplier for all its meat. After evaluating multiple providers, the business selects one that meets its strict sustainability standards and offers favourable pricing. This streamlines procurement while ensuring consistent product quality.
2. Corporate cleaning contracts for high-rise offices
A corporation operating in a multi-floor office tower may engage a single commercial cleaning agency to manage building sanitation. Using one trusted vendor improves coordination, simplifies billing, and ensures cleanliness standards are maintained throughout the premises.
3. Tech firms working on proprietary innovations
A Singapore-based IT company developing a new software product may need a specific hardware component. By sourcing that component from a single, vetted manufacturer under a confidentiality agreement, the company ensures both quality and security during development.
4. Marketing agencies serving media publishers
A healthcare news portal might outsource all content production to a single agency. This approach offers consistency in voice and tone, simplifies communication, and enables predictable costs while increasing publishing output.
These examples show how single source procurement boosts efficiency, enhances vendor accountability, and maintains quality across industries. Choosing one supplier is a strategic decision, not a sacrifice of flexibility, based on business goals, supplier skills, and long-term value.
Optimise Single Sourcing with HashMicro’s Procurement Software
Effective single sourcing requires more than vendor selection. Businesses need clear visibility, reliable processes, and consistent supplier performance for long-term success. HashMicro’s procurement software aids smarter sourcing by supporting the entire procurement cycle with powerful, user-friendly tools.
Here are some of HashMicro’s procurement software features that will help you succeed in single source procurement:
- Supplier management
Strengthen your supplier relationships through a complete overview of performance, delivery history, and contract details. The system helps you track key metrics to make informed decisions about your preferred vendor.
- Purchase order management
From creating to tracking orders, the system helps you manage every step more efficiently. This ensures that your procurement process stays accurate and aligned with supplier terms.
- RFQ (Request for Quotation) management
Quickly gather, compare, and evaluate offers from suppliers. Whether you’re selecting a primary supplier or reviewing pricing, this tool makes comparisons more transparent and decision-making easier.
- Purchase request processing
Speed matters in sourcing. With fast handling of purchase requests, your team can move from approval to order without unnecessary delays, keeping operations running smoothly and consistently.
- Custom approval workflows
Control your sourcing policy through flexible approval setups. You can customise the flow to match your company’s structure and ensure that every decision goes through the proper channels.
With these features, HashMicro’s procurement software gives Singaporean businesses the structure they need to manage single sourcing with confidence. The system supports better planning, faster decisions, and stronger vendor relationships, all while improving efficiency and reducing manual work.
Conclusion
Adopting a single sourcing strategy can bring consistency, lower procurement costs, and streamline vendor communication. However, it requires careful supplier selection and oversight to avoid potential disruptions. When executed well, it provides companies with a reliable edge in operational efficiency.
To support this approach, businesses need systems that ensure clarity, speed, and accuracy across procurement tasks. HashMicro’s procurement software enables teams to monitor supplier performance, automate routine processes, and reduce manual errors. This leads to stronger partnerships and more informed decisions.
If you’re considering a switch or want to strengthen your sourcing framework, now is the time to explore your options. Book a free demo with HashMicro to see how our solution supports single sourcing and improves procurement outcomes tailored to your business needs.
FAQ about Single Sourcing
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What is the difference between single and multiple sourcing?
Single sourcing uses one supplier for a specific need, while multiple sourcing involves working with several suppliers for the same product or service to reduce risk.
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What are types of sourcing strategies?
Common sourcing strategies include single sourcing, sole sourcing, dual sourcing, multiple sourcing, global sourcing, and local sourcing.
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What is the difference between single source and dual source procurement?
Single source procurement relies on one supplier by choice, while dual sourcing splits orders between two suppliers to improve flexibility and reduce supply risks.
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What is the difference between ERP and S2P in procurement?
ERP covers broad business functions including procurement, while S2P focuses specifically on the end-to-end procurement process from supplier selection to payment.
