When to keep two suppliers for the same category

After a plastics supplier went into administration in 2024, a Brisbane injection-moulding client lost six weeks of production while qualifying a replacement. They now keep a qualified backup for their two highest-volume resins. The backup supplier gets four orders a year — enough to stay warm, not enough to complicate forecasting.

Signs you need a second source

• A single supplier accounts for more than 60% of spend in a category that would halt operations if supply stopped
• Lead times have lengthened twice in twelve months without a clear explanation
• Your supplier is a small operation with key-person risk — one owner, one production line
• You are entering a growth phase where volume jumps could exceed your supplier’s stated capacity

Signs one supplier is enough

• The item is commoditised with many equivalent alternatives you could switch to in days
• Qualification cost is high (food safety audits, custom tooling) and a backup would rarely be used
• Your volume is too small for any second supplier to take you seriously without a premium

The admin trade-off

Two suppliers means two price lists, two invoice cycles, and sometimes split MOQs that reduce negotiating power. We often recommend a qualified but dormant backup: documents verified, one trial order placed, then periodic re-qualification annually rather than active splitting.

Document the trigger that would move volume — for example, two consecutive late deliveries or a price rise above an agreed threshold. That way the switch is a decision rule, not a panic.

Need help mapping concentration risk across your vendor list? Start with our engagement process or request a scoped review.