Dual-sourcing policy: how to allocate volume
Set product-specific concentration ceilings, a minimum production activity plan for the backup, readiness checks and time-limited exceptions with named approvers. Base allocation on demonstrated capacity and acceptable disruption exposure. Cambridge China Bridge can support factory follow-up through its own staff in China.
Use DBT guidance to frame your policy
DBT describes its resilience framework as an aide for reducing supply-side risks. Use it to structure your decisions. Our reading of the framework is that it provides resilience guidance rather than a statutory allocation formula; set your own allocation limits and approval process.
This policy starts after supplier approval. Use the second-source qualification guide for admission gates and the supply-chain de-risking guide for wider dependency mapping. The ongoing policy should record each product family's concentration ceiling, backup activity, readiness evidence, review date and exception owner.
Define concentration limits that purchasing can apply
For each product family, define the maximum allocation to a supplier and the period used to measure it. Choose a consistent basis, such as ordered production units, and record actual accepted output separately. Avoid relying on spend alone: price differences can hide dependence on the supplier producing most of the goods.
Group sites with shared ownership or critical production dependencies when assessing exposure. Set the ceiling against the disruption the business can tolerate and the backup's demonstrated ability to replace supply. Review planned orders before release and actual allocation afterwards. A lower price should not silently override the ceiling.
Make minimum backup activity operational
Specify the production work needed to keep the backup usable: approved products to run, representative processes to exercise, accepted output to deliver and the longest permitted gap between runs. Agree these settings with the factory against demand, production economics, tooling and material availability. A token order that avoids the critical process provides weak readiness evidence.
Treat backup activity as planned purchasing, with an owner and budget, rather than leftover demand. If demand falls below the activity plan, require a decision to fund a representative maintenance run, revise the arrangement or classify the source as dormant. Record the reactivation work before counting dormant capacity as available.
Check readiness on a schedule and after changes
Set review dates according to product criticality and how quickly capability can change. Check current drawings, tooling condition, material access, trained operators, recent accepted production and available capacity. Ask the factory to explain how an increased allocation would reach production and dispatch. Separate proven output from capacity that is only promised.
Recheck after a missed maintenance run, failed batch, tooling move, critical input change or loss of key staff. Use a representative production exercise where records alone cannot establish readiness. Record findings, corrective actions and the buyer's decision to retain, restrict or suspend backup status. Use the repeat factory audit guide when a deeper site review is needed.
Approve exceptions with an expiry and recovery plan
Require a written exception before exceeding the concentration ceiling or missing backup activity. Record the affected products, reason, evidence, additional exposure, temporary safeguards, named approver and expiry date. Procurement should explain the allocation change; quality and engineering owners should approve changes affecting their acceptance criteria.
Possible reasons include a quality hold, unavailable tooling or demand too low to sustain the agreed activity. Evaluate safeguards such as accepted stock, confirmed capacity reservation or controlled demand reduction. At expiry, restore the plan, obtain fresh approval or revise the policy explicitly. Keep the exception log beside allocation and readiness records so repeated waivers remain visible.
Frequently asked questions
Does DBT require a fixed dual-sourcing split?
The framework describes itself as a resilience aide. Our reading is that it does not prescribe an allocation split. Set your own product-specific limits and document their basis.
How much volume should a backup supplier get?
Allocate enough representative production to keep the agreed capability usable. Base this on critical processes, demand and factory economics, then record the activity plan and evidence needed.
How often should we check backup readiness?
Set a risk-based schedule and recheck after material changes or failed production. Review recent accepted output, tooling, inputs, people and capacity; use a production exercise where needed.
Can we pause orders to the backup factory?
Use an approved exception with an expiry, safeguards and reactivation plan. If capability is no longer demonstrated, classify the supplier as dormant and verify readiness before relying on it.