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Concentration Risk Beyond Tier 1: A Decision Framework for Supply Chain Leaders

Concentration Risk Beyond Tier 1: A Decision Framework for Supply Chain Leaders
October 6, 2026 5 min read

Quick Answer

A decision framework for supply chain leaders to uncover hidden N-tier concentration risk, identify shared upstream dependencies, assess substitutability, and make better sourcing and resilience decisions.

Diversification can be real on paper and fragile in practice.

A procurement team may qualify multiple direct suppliers, split volume across regions, and maintain alternate contracts. Yet those suppliers can still converge on the same upstream manufacturer, material producer, processing facility, port, or geography. The Tier-1 sourcing model looks diversified while the N-tier network remains concentrated.

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