A Systematic Approach to Implementing Multi-sourcing Strategy in Engineer-to-Order Production

Mwesiumo, D.; Nujen, B. B.; Kvadsheim, N. P.

Engineer-to-order (ETO) manufacturers operate in an increasingly volatile, uncertain, and complex business environment, which has added more complexity to their already complex supply chain operations. As they navigate the ramifications of the COVID-19 pandemic, they need knowledge-based guidance on selecting and implementing approaches to increasing resilience. Based on a clinical management design, this study develops a systematic approach for a case firm that recently transitioned from single sourcing to multi-sourcing. The goal is to strike a balance between the total cost of acquisition and supply chain resilience. The study reveals that effective implementation of multi-sourcing in ETO production requires involving the purchasing and supply function (PSF) right from the design stages. Besides, it is essential to deploy a cloud-based procurement system that facilitates interactions between PSF and the suppliers, as well as other critical organisational functions involved in an ETO project. © 2021, IFIP International Federation for Information Processing.