Tool Gate · How it works
How the Supplier-Concentration Risk Gate gate works
How the Supplier-Concentration Risk Gate scores 6 sample suppliers on spend share, contract status, and alternate sourcing: an uncontracted-concentration gate forces any supplier over 18% of spend with no signed contract to SINGLE-SOURCE RISK, and one hit flips the whole base — which is how the sample base reads SUPPLY-SHOCK RISK on a $1M spend base.
How the gate works
This tool grades a supply base's spend concentration and single-source exposure. It reads 6 suppliers and rolls them into one verdict — the worst, never the average — and then a gate that can only make it worse.
The 6 suppliers
| Supplier | Verdict |
|---|---|
| Sole-source manufacturerfix first | SINGLE-SOURCE RISK31% of spend · no contract · gate fired |
| Primary component vendor | EXPOSED20% of spend · contracted, no alternate |
| Secondary materials | EXPOSED19% of spend · has an alternate source |
| Packaging vendor | SECURED12% of spend · has an alternate source |
| Logistics / freight | SECURED10% of spend · contracted + alternate |
| Specialty coating | SECURED8% of spend |
The verdict bands
A supplier crossing 18% of total spend (or 25% with a qualified alternate source) with no signed contract is forced to SINGLE-SOURCE RISK regardless of its share score, and one SINGLE-SOURCE RISK supplier flips the whole base to SUPPLY-SHOCK RISK.
In the worked sample it reads SUPPLY-SHOCK RISK — Six suppliers, $1,000,000 in total spend. The sole-source manufacturer carries 31% of it with no signed contract - past the 18% uncontracted line - so it's forced to SINGLE-SOURCE RISK even though two other vendors also carry double-digit shares. One supplier crossing that line is enough to flip the base. The one thing to fix first: Sole-source manufacturer - get it under a signed contract (or qualify a second source) before next quarter; it's the only supplier that trips the gate..
Common questions
Can every supplier look survivable on the How the Supplier Concentration Risk gate works and the company still read SUPPLY-SHOCK RISK?
Yes. The roll-up takes the worst of 6 suppliers — never the average — then a worsen-only gate, the Uncontracted-concentration gate gate, escalates when trouble clusters. In the worked sample it reads SUPPLY-SHOCK RISK because six suppliers, $1,000,000 in total spend. The sole-source manufacturer carries 31% of it with no signed contract - past the 18% uncontracted line - so it's forced to SINGLE-SOURCE RISK even though two other vendors also carry double-digit shares. One supplier crossing that line is enough to flip the base.
What is a worsen-only gate?
A dispositive rule that can only lower a verdict, never raise it. One fatal flaw overrides an otherwise-set of survivable lines, because a single disqualifying gap shouldn't hide behind an average of the healthy ones. The tool also names the one thing to fix first — here, "Sole-source manufacturer - get it under a signed contract (or qualify a second source) before next quarter; it's the only supplier that trips the gate.".
Grades a supply structure from the numbers you enter; connects to nothing and isn't financial, accounting, or investment advice.
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<p style="font:14px/1.5 system-ui,sans-serif"><a href="https://redhub.ai/visuals/tool/supplier-concentration-risk-gate">How the Supplier-Concentration Risk Gate gate works</a> — by <a href="https://redhub.ai">RedHub AI</a>, the AI that tells you when to doubt it.</p>Image + link — a static picture for any blog
<a href="https://redhub.ai/visuals/tool/supplier-concentration-risk-gate"><img src="https://redhub.ai/visuals/tool/supplier-concentration-risk-gate-share.png" alt="Diagram of the Supplier-Concentration Risk Gate: six suppliers rolled up to the worst, an uncontracted-concentration gate flagging a sole-source manufacturer at 31% of spend, and the base reading SUPPLY-SHOCK RISK." width="760" loading="lazy" style="max-width:100%;height:auto;border-radius:16px"></a>
<p style="font:14px/1.5 system-ui,sans-serif"><a href="https://redhub.ai">RedHub AI</a> — the AI that tells you when to doubt it.</p>
This is how The Supplier-Concentration Risk Gate works. More diagrams in the Visual Field Guide.