supply based reduction
supply based reductionthe reduction in the number of suppliers used to provide a firm with its input requirements. Some firms use a single supply source to provide all their requirements of a particular input. Relying on a single supplier may allow a firm to reduce its costs (through the discounts given on bulk-buying) and facilitate the operation of a JUST-IN-TIME (JIT) production system. On the other hand, relying on a single source of supply may expose the firm to a greater risk of supply disruptions. See SOURCING, LEAN PRODUCTION.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson