Managing multiple suppliers: ‘best of breed’

In addition to the risks inherent in managing each individual outsourcing contract and relationship, many companies choose to create a range of niche outsourcing deals with different specialist providers. This adds a further level of complexity and risk that has to be managed and mitigated.

One prevalent approach to managing multiple suppliers is Pareto Optimality, named after the Italian economist Vilfredo Pareto. In simple terms, Pareto Optimality is a measure of efficiency based on the premise that whatever outcome arises, there is no other outcome that will leave every participant at least as well off and at least one player strictly better off. So a Pareto Optimal outcome cannot be improved upon ...

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