Five areas of concern
The authors identify five areas or categories that must be evaluated before selecting the appropriate sourcing strategy:
supply disruption
e.g. are there alternative sources if supply is disrupted?
price escalation
e.g. what if the supplier suddenly raises prices?
inventory and scheduling
e.g. how will having one or more vendors affect inventory reliability?
technology access
e.g. does the vendor keep up with the latest technology?
quality
e.g. what if the selected vendor cannot meet quality standards?
For each area pros and cons (or risks and benefits) for the different sourcing strategies must be considered before making a decision.