Supply chain diagnostic

Problem we solve

Sourcing portfolios at large industrial firms, defence primes, and energy-transition players typically pass two stress tests and fail a third. They score well on supplier count and on price benchmarking, and fail on criticality: a handful of inputs whose disruption would halt the line, stall a programme, or trigger force-majeure clauses, bought from a thin set of origins that the firm has neither mapped in depth nor substituted even partially. The diagnostic targets that third layer.

Four questions structure the engagement. Which inputs are critical, in the narrow sense that near-term substitution is infeasible and their disruption would materially affect revenue or mission? Where do those inputs actually originate, once the immediate supplier is traced back through the value chain? Through which maritime or logistics chokepoints do they route, and what is the concentration on each leg? And which friendshoring alternatives are genuine, in the sense of existing capacity plus a realistic ramp, rather than aspirational press-release capacity?

Data used

CEPII BACI HS6 bilateral trade from 1995 forward, stored in thousands of USD, for the flow panel. OECD Geodependency indicators for upstream concentration and product criticality. Maritime route exposure derived from public vessel-traffic data combined with BACI port-of-entry flags, to size the share of each input that routes through each major chokepoint. The USGS Mineral Commodity Summaries critical-minerals list and the IEA World Energy Outlook supply-security annexes for the critical-mineral and energy-input lines. OECD TiVA for the foreign value-added share per sector.

Client bill-of-materials and purchase-order data, if provided, is matched to the BACI cell structure at HS6 so that internal and public numbers line up at the same grain. No client-confidential data appears on the public TradeWeave site; the Parquet corpus used for benchmarks and alternative rankings is open.

Method sketch

Upstreamness of each input is computed following Antràs, Chor, Fally and Hillberry (2012), which defines the measure as the weighted average distance from final use along the input-output structure. Foreign value-added share of the sectoral output follows Koopman, Wang and Wei (2014) in spirit, using the sectoral decomposition of gross exports into value-added components. Criticality scoring combines single-origin HHI at HS6, near-term substitutability drawn from the USGS and IEA annexes, and a stockpile-buffer adjustment where official stockpile data are available.

Friendshoring alternative rankings are produced by scoring candidate origin countries against three criteria: existing export capacity at the relevant HS6 line, political and regulatory proximity to the client’s home jurisdiction, and the implied ramp time given observed export-growth frontiers for comparable shifts in the BACI panel. The ranking is reported with a sensitivity band that reflects the uncertainty on both the capacity and the ramp estimates, so that a procurement team can see which alternatives are robust to the choice of weights.

Deliverable

A twenty-page brief with a supplier-by-HS-line risk map on the front page, an upstream-stage diagram for each critical input, a chokepoint-exposure chart that aggregates across inputs, and a ranked friendshoring alternatives table per input. The brief names the top critical inputs, quantifies the single-origin exposure, identifies the chokepoints most likely to affect the portfolio simultaneously, and flags any alternatives whose capacity numbers are thin enough that procurement should verify with the vendor before acting on them.

Alongside the brief, the client receives a Parquet slice of the treated series, including the bilateral panel at HS6, the upstreamness and FVA scores, the chokepoint exposure table, and the alternatives rankings with their sensitivity bands. The DuckDB queries behind each figure are documented for reproducibility by a client analyst.

Related workbench pages

The public workbench covers much of the same terrain on an open-data basis and is the fastest way to see the method before commissioning. See the critical inputs and critical minerals pages for the criticality scoring framework, chokepoints for the maritime-route exposure overlay, and friendshoring for the alternative-supplier ranking. The broader supply-chain overview places these pieces in context, and the stranded assets page covers the downside cases where the alternative basket itself is exposed to the energy transition.

Timeline

Typical engagement runs three to four weeks. Week one covers scope, bill-of-materials reconciliation to HS6, and the criticality shortlist. Week two covers upstreamness, FVA, and chokepoint routing. Weeks three and four cover the friendshoring alternatives, sensitivity analysis, and the written brief. Timelines expand where the portfolio spans several distinct product lines with limited HS6 overlap, or where the client needs supplier-level rather than origin-level resolution on the alternatives block.

Start a conversation

If a supply chain diagnostic fits the current question, contact us with a short description of the product line or programme, the inputs of greatest concern, and the decision the diagnostic should inform. We reply within two business days with a scoping memo and an indicative timeline.