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Keeping a customer’s price fixed can leave a business absorbing changes in delivery costs. A later price increase may come too late to recover them.
When only a few suppliers can afford to expand, their customers may become more dependent on them, even if every supplier stays in business.
Expanding a manufacturing or supplier base requires more than a new site. This week’s Signal Radar examines what must be transferable before new capacity can become dependable supply.
A company’s suppliers can remain reliable while its deliveries become less dependable. Competition for shared infrastructure explains how growth in one industry can create risk in another—and why supplier diversification may leave the underlying dependence intact.
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