What is sole sourcing in SAP MM-PUR - Purchasing?

SAP Term: sole sourcing

• Component: MM-PUR

• Component Name: Purchasing

• Description: The procurement of a material from just one vendor because the latter has a monopoly of the market.

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• Key Concepts: 
  Sole sourcing is a purchasing strategy in which a company only buys goods or services from one supplier. This strategy is used when the company believes that the supplier is the only one who can provide the goods or services they need. It is also used when the company wants to build a long-term relationship with the supplier. 
  
  How to use it: 
  In SAP MM-PUR Purchasing, sole sourcing can be used to ensure that all of the company’s purchasing needs are met by one supplier. This can be done by setting up a contract with the supplier and specifying that all purchases must be made from them. The contract should also specify any discounts or other benefits that the company will receive from the supplier. 
  
  Tips & Tricks: 
  When using sole sourcing, it is important to make sure that the supplier is reliable and able to meet all of the company’s needs. It is also important to review the contract regularly to make sure that it is still beneficial for both parties. 
  
  Related Information: 
  Sole sourcing is often used in conjunction with other purchasing strategies, such as competitive bidding and strategic sourcing. It can also be used in combination with other strategies, such as inventory management and vendor management.