03.06 Supply Chain Dual Sourcing and Supply-Disruption Switching Playbook
Governance metadata | Owner: Head of Supply Chain | Last reviewed: 2026-10-22 | Next review: 2027-01-31
Core principle: single-source supply is the hidden total-loss risk of hardware overseas expansion. Dual sourcing is not "two names on a list" but certification, tooling, materials, inventory, and switching cost being executable within 30–60 days. This document provides the default playbook for identification, triggers, switching, finance, and post-mortem review. Contract manufacturing commercial terms: see 03.02; quality traceability: see 03.07.
1. What Counts as Real Dual Sourcing
| Tier | Single-source risk | Switchable dual source (minimum bar) | Acceptance evidence |
|---|---|---|---|
| Whole-unit contract manufacturing | Only 1 ODM | 1 primary + 1 backup; backup factory passes trial tooling / small batch | Backup factory small-batch report |
| Critical modules | Only 1 supplier (optics / battery / motor) | ≥2 suppliers passing key DVT items | DVT report + difference table |
| Core part numbers | Single chip/sensor | pin-to-pin or firmware adaptation + safety stock | Alternate part approval form |
| Tooling | Only 1 set locked in one factory | Dual cavity / spare cavity, or ownership can be transferred out | Tooling ownership and transfer-out SOP |
| Capacity | A single line at full load | Backup line can start within 4 weeks | Capacity reservation agreement |
Red single points: critical path + no alternative + lead time > 8 weeks → must be entered into the GR2 risk list at [01.08], with an owner and a closure date assigned.
Red Single-Point Scan Table (Template)
| Material/module | Single source | Lead time (weeks) | Switching cycle | Safety stock (days) | Owner | Closure plan |
|---|---|---|---|---|---|---|
| Main SoC | Yes | 20 | 12+ | 15 | Supply Chain | Material preparation / alternate qualification |
| Battery pack | Yes | 10 | 8 | 20 | Hardware | Second cell DVT |
| Main tooling | Yes | 14 | 14 | — | Structure | Ownership + transfer-out |
| Packaging printing | No | 3 | 2 | 30 | Packaging | Dual-factory rotation |
2. Supply-Disruption Trigger Tiers
| Tier | Trigger | Response deadline | Commander | Parallel actions |
|---|---|---|---|---|
| P0 | Primary factory shutdown / EOL / withheld goods creating a stockout risk > 4 weeks | 24h war room; 72h switching plan | GTM operator | Customer complaint contingency 07.05, tariff path 07.08 |
| P1 | Yield collapse, 2 consecutive weeks of missed delivery | 72h assessment; 2 weeks to lock the backup source | Supply Chain A | Update the 03.05 light |
| P2 | Logistics issue / brief shutdown | 1 week to expedite + raise inventory | Planning manager | If channel commitments are unchanged, escalate to P1 |
3. Switching Decision Tree (Default)
Supply-disruption signal
├─ Does it affect shipments in the next 30 days?
│ ├─ No → Expedited logistics + raise safety stock (03.05 light color)
│ └─ Yes ↓
├─ Has the backup source already been certified to the same spec / small batch?
│ ├─ Yes → Lock capacity → Tighten IQA → Communicate delivery dates to channels
│ └─ No ↓
├─ Can certification / mold modification be completed within 30 days?
│ ├─ Yes → Conditional: limited pilot production + reduce channel commitments
│ └─ No → No-Go: stockout PR + postponement / SKU reduction (07.05)Financial red line (default): If the switch drives Landed Cost +>5% or BEP +>15% → return to 01.08 / Finance; sales are forbidden to promise the original price and original delivery date without a signed approval.
Certification red line: A backup source lacking mandatory certification (FCC/CE/BIS etc. 07.02) must not pass off "engineering samples" as mass production.
4. Switching Execution Playbook (By Day)
| Day | Action |
|---|---|
| D0 | Stand up the war room group; freeze new channel commitments |
| D0+1 | Confirm backup source capacity window; BOM difference table |
| D0+3 | First-batch inspection standard (AQL one level tighter); packaging / labeling |
| D0+7 | Finance scenario into 07.06; cash validation 07.07 |
| D0+14 | Written delivery date update to channels; MAP unchanged |
| D0+30 | Post-mortem review: yield, customer complaints, dead stock, cost variance |
5. Default Inventory Policy (Connected to 03.05)
| Material type | Recommended safety stock | Notes |
|---|---|---|
| Long-lead-time chips | ≥15 days + 1 order window | Double until dual sourcing is complete |
| Structural parts | ≥20 days | Higher when the tooling is single-sourced |
| Packaging | ≥30 days | Lower if it can be localized |
The single source of truth for DOS light colors: 03.05.
6. Switching Checklist
[ ] Primary/backup BOM and firmware difference table (permitted differences signed)
[ ] Backup source safety and reliability certifications within their validity period
[ ] Tooling ownership and transfer-out proof
[ ] First batch IQC tightened + aging
[ ] Channel talking points; MAP unchanged
[ ] Cost variance into the 07.06 scenario
[ ] Cash: switching prepayment vs 07.07
[ ] Certification coverage confirmed (07.02)
[ ] 30-day post-mortem review meeting booked
7. Related Documents
- Contract manufacturing → 03.02
- Locked quantity / funding → 03.04 / 07.07
- PSI → 03.05
- Crisis → 07.05
- Tariffs → 07.08
- SQE → 03.07
8. Switching Cost Breakdown (Feeds Finance)
| Cost item | Magnitude reference | One-off |
|---|---|---|
| Backup source certification / testing | Per project | Yes |
| Mold modification / fixtures | Per project | Yes |
| Air freight replenishment | Freight rate difference | Phased |
| Resident engineers | Person-weeks | Phased |
| Unsold primary-source inventory | Book value | Requires a disposal plan |
All of it enters the 07.06 scenario; prepayments enter 07.07.
9. Communication Template Essentials (Channels)
- Promise only "no later than date X" or a "phased delivery schedule"
- Never promise "never out of stock"
- Compensation is limited to the signed SLA
10. 30-Day Post-Mortem Metrics
| Metric | Target |
|---|---|
| Backup source first-pass inspection yield | ≥ primary source steady state − 5pt |
| Customer complaint rate | ≤ 1.2× the pre-switch level |
| Actual landed cost variance | ≤ model + 2pt |
| Unsold primary-source inventory | Written disposal plan in place |
11. Single-Point Heat Map (Example; Must Be Filled Per Product)
| Module | Supplier count | Geographic concentration | Power / strike risk | Overall |
|---|---|---|---|---|
| SoC | 1 | High | Medium | Red |
| Battery | 1 | Medium | Medium | Red |
| Injection-molded parts | 2 | Low | Low | Green |
| Packaging | 2 | Low | Low | Green |
Red items go into the GR2 closure plan.
12. War Room Group Rules
- Prohibited to commit delivery dates externally before the tier is assigned
- All decisions @ a named person
- Written update daily at 18:00 (if P0)
13. Link to 01.10 GR4
Post-launch supply disruption: GR4 Conditional can be bundled with "reduce SKUs to protect delivery", avoiding heavy advertising with no stock in hand.
14. Post-Mortem Report Structure
- Timeline
- Root cause
- Switching cost actual vs model
- Customer complaints and channel impact
- Systemic improvements (contract terms / inventory / dual sourcing)
16. Industry Comparison: Which Categories Have More Red Points
| Category | Common red points |
|---|---|
| Energy storage | Cells + BMS |
| Lawn mowers | RTK / motor |
| Telescopes | Optical module |
| TWS | Controller + battery |
17. Key Dual-Sourcing Contract Clauses
- Minimum capacity guarantee or priority supply
- Tooling ownership
- Prohibit exclusivity that locks out the backup source (legal review)
18. Drill Script (P0 Half-Day)
| Time | Action |
|---|---|
| 0h | Simulated shutdown notification |
| +1h | Red point confirmation and tier assignment |
| +2h | Backup source capacity confirmed by phone |
| +4h | Finance impact table draft |
| +6h | Channel talking points finalized |
19. Link to 08 Projections
High-ASP projections must include the 03.06 page, otherwise the story is incomplete.
21. Switching Cost Fill-In Table (Feeds 07.06/07.07)
| Cost item | Amount | One-off / recurring | Owner |
|---|---|---|---|
| Backup source certification | One-off | Hardware | |
| Mold modification / fixtures | One-off | Structure | |
| Air freight replenishment | Phased | Logistics | |
| On-site support | Phased | SQE | |
| Primary-source dead stock disposal | One-off | Finance | |
| Total peak increment | Finance |
Peak increment > 20% of the cash buffer → escalate to the GTM operator for approval.
22. Communication Matrix (Who Says What, and When)
| Audience | When (P0) | Content | Prohibited |
|---|---|---|---|
| Channels | Within 24h | Delivery impact + phased delivery table | "it's fine, no impact" |
| Customer service | Within 24h | Unified talking points | Frontline private promises |
| Investors / board | Within 48h | If shipment guidance is affected | Concealing a major supply disruption |
| Public | Only when necessary | Legal review | Self-congratulatory statements |
23. Post-Mortem Closure Criteria
[ ] The root cause is not "the supplier suddenly" but has leading indicators
[ ] The red point heat map has been updated
[ ] At least one systemic change has been made to contract / inventory / dual sourcing
[ ] Actual vs model cost deviation <15% or has been explained