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Enterprise · Decision models · Procurement · Supplier concentration risk
Route 02 · Enterprise · Procurement · Model 17 of 41

Supplier concentration and sole-source premium model

Concentration measured against parent ownership rather than vendor name, then priced — what the dependency costs in rate today, and what a replacement costs when it happens. The trades are ranked by exposure, not by how concentrated they look.
$1.4M
Reference-scale value
7
Data sets in the model
7 weeks
Build and deploy
Derived
Evidence grade
01

The decision this model makes

Every trade has a vendor you would rather use. Over a few years that preference becomes a dependency, and the dependency has a price you pay every month whether or not anything goes wrong.

It is not the failure that costs the most. It is the rate. A vendor who knows there is no second name on the list does not have to be aggressive to price above a contested rate — they only have to be patient at renewal.

Nobody produces this number today because the ledger records vendors, not concentration. Two subsidiaries of one parent read as two vendors. A trade split ninety-five and five reads as a trade with two suppliers. The measure you need is not in the report you have.

The model resolves the vendor master to parent ownership first, then measures concentration per trade, then prices it — premium, replacement, schedule and warranty, with the last two credited to other services.

Cause 01
Sole-source premium

What a rate does when there is no second bid to price against. Not a penalty for anything, and the largest addressable share.

Cause 02
Replacement cost

Concentrated vendors exit, fail or get acquired. Each costs a rate step and an expedite to cover the trade at short notice.

Cause 03
Schedule cost

Cycle days lost when a concentrated trade fails. A scheduling cost, credited to the trade capacity service.

Cause 04
Warranty cost

A concentrated trade with no comparison has no quality benchmark either. Credited to warranty and rework.

02

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The rest of this model — the data sets it runs on, the cause split, the working behind the reference figure and a sample output — goes out by email. Two fields, nothing else.

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