Dual sourcing

Related terms

Safety stock

Safety stock is extra inventory held above expected demand to cover supplier delays, quality holds, and demand spikes. It is often set in weeks of usage. Longer or less predictable supply chains, including most offshore sources, need more safety stock, which adds carrying cost.

Nearshoring

Nearshoring is moving production to a nearby country, for US buyers usually Mexico or Canada, to cut transit time, inventory, and tariff exposure while keeping labor costs below domestic levels. Parts that meet USMCA rules of origin can enter the US duty-free.

Tooling ownership

Tooling ownership is the legal title to molds, dies, and fixtures, and the right to control them. Customer-owned tooling is paid for by the buyer and can be moved to another supplier; supplier-owned tooling stays put. Ownership, maintenance, and transfer terms belong in writing before the tool is built.