2026-01-20 · Core Vertexpoint
When Supplier Concentration Becomes a Budget Risk
How to spot over-reliance on a single vendor before a price increase or capacity shortage hits the annual plan.
Concentration is easy to miss when each purchase order looks routine. Aggregated by supplier, the picture changes. A facilities category that appears diversified across twenty vendors may still send sixty percent of invoice value to one national contractor.
Set a simple threshold. Many sourcing teams in Bangkok treat any supplier above thirty percent of category spend as a conversation point, not an automatic red flag. Below that, dual-sourcing costs may outweigh the risk.
Pair concentration with switching difficulty. A sole-source chemical with a long qualification cycle deserves earlier attention than a commodity carton supplier with three qualified alternates ready to quote.
Bring the chart to finance before renewal season. Budget owners respond better to a visual share-of-spend than to a verbal warning that “we depend too much on one firm.”