One-Stop-Shop vs. Multiple Supply Chain Setup: Which one is Best for you?

one-stop-shop

When you are running a manufacturing business, it’s important to consider the lead times in your business model. Choosing the right supply system in your business will be essential here. The two main choices are either using a multiple supply chain setup or a one-stop-shop. Lead times are the amount of time that will pass between the start of the process to the point where it reaches its conclusion. Long lead times will mean that your business model is inefficient and this will make it more difficult to achieve a high level of efficiency.

Similarly, it’s also important to think about the quality of the components you are using. This can impact the quality of the final product and determine whether you earn the trust of buyers on the market. 

What Is A One-Stop Shop?

A one-stop-shop means that all the manufacturing of components is completed in house. As such, there is no outsourcing as part of this process. A key advantage of this option is that there are no extra costs because a supplier doesn’t mark up the component that they have purchased on the market. There is also a higher level of communication with this option.

You will be able to talk directly with the team making your product and ensure that any issues can be rectified early on in the process. This option also ensures a better product fit. The time behind the component will have a better understanding of how it fits with the final product. 

One disadvantage is that the supply line is more vulnerable. This means that you could be more exposed to issues with supply interruption, particularly for specific products.

What Is A Multiple Supply Chain Setup?

A multiple supply chain setup is a system where a business will outsource various levels of the supply chain to other companies to manufacture different parts and components. A key advantage here is that there are alternate sources so it’s unlikely you will experience a supply interruption. There is also an increased level of flexibility in the supply chain to ensure that manufacturers can quickly adapt to changing circumstances on the market. 

However, it is unlikely that a supplier will take significant measures to match the requirements of a buyer. Furthermore, prices are likely to be higher because the original supplier must adjust the price to make a profit.

Which One Is Best For Your Component?

You might be wondering what choice will be best for the manufacturing of your component. Our recommendation would be a one-stop-shop. You will be able to access a high-value component at a lower cost.

You will also be able to interact directly with the team in charge of making the component and ensure that they always understand exactly what you need. This means that you won’t have to worry about any issues with confusion about what you want for your business and you can benefit from low lead times. This is going to lead to greater overall levels of efficiency in your business model. 

How could a one-stop-shop manufacturer improve your component manufacturing lead times and quality? Click here to read how Radshape can provide a fully managed in-house process to save on long lead times.

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