A manufacturer approves three suppliers for a specialised component, each in a different country, each with a separate contract. From a commercial perspective, the arrangement appears genuinely diversified. According to Navigating Supply Chain Challenges by Dr. Uppiliappan Gopalan, appearances like this deserve closer scrutiny.
One Capability Hiding Behind Three Names
When delays begin appearing across all three suppliers during the same period, further investigation reveals one common connection: all three rely upon the same lower tier producer for a critical material. Commercially, the organisation has three suppliers. Operationally, it depends upon one critical capability.
Why the First Name on the Report Is Rarely the Full Answer
Direct suppliers receive most of an organisation’s attention because contracts, forecasts and quality reviews create regular contact. Lower tier producers often remain outside routine visibility, even though their output may influence several direct suppliers and multiple product lines at once. The point where visibility ends, Dr. Gopalan warns, may still carry operational dependency.
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