Concentration alone is not the risk
A supplier holding a large share of a department is normal and often efficient. The risk appears when high concentration coincides with those same lines trending down toward reorder points at the same time. That combination, not concentration by itself, is what precedes a category-wide stockout.
Why it needs a cross-store view
Concentration is a group-level pattern. A supplier that looks balanced in one store can dominate a department across the network. Measuring share of a department by revenue across every store, then checking the stock trend on those lines,
turns a vague sense of dependence into a specific, timed warning.
What the warning buys you
Seen early, concentration risk is a negotiation position and a second-source decision. Seen late, it is an empty shelf. The value of surfacing it is the lead time to diversify supply or renegotiate before the disruption arrives.
In one 7-store Australian pharmacy group, supplier concentration reached 97.7% in an at-risk department, surfaced as a flag rather than discovered after a stockout.