Three approved suppliers share one critical upstream source
A fictional manufacturer purchases a component from three approved first-tier suppliers. A supplied mapping exercise finds that all three depend on one upstream producer for the same essential input. Each supplier has passed a limited quality review, and none has demonstrated a qualified substitute for that input. A colleague proposes declaring the supply fully diversified because three contracts exist. Another examines the actual dependency, substitution options, interruption consequences and ongoing ownership. This written case awards no contract and contacts no supplier. It asks what the supplier count establishes, which resilience claim is unsupported and why a rating or audit does not automatically answer the specific continuity question.
1. What common risk remains?
Read the worked answer
The shared upstream producer can affect all three suppliers in one event. First-tier count alone does not establish independent supply continuity.
2. What should an authorized review examine?
Read the worked answer
Validate dependency evidence, qualified alternatives, actual inventory/lead-time and service impacts, treatment options and accountable owners rather than automatically approving a nominal supplier count.