What Satellites Reveal About Concentration Risk in Multi-Tier Supply Chains

The Space Development Agency (SDA), a U.S. Space Force agency, is sounding the alarm on concentration risk in the satellite supply chain.

The SDA has ambitious plans to deploy hundreds of small satellites in low-Earth orbit, but risks have emerged with contractors relying on single sources for critical subsystems, threatening to delay the project. Col. Alexander Rasmussen, chief of SDA’s Tracking Layer program, emphasized the need for government contractors to diversify the supplier base for mission-critical components and to get supply chains “energized” early.

Concentration risk is endemic across multiple public and private sector organizations, fueled by interdependent supply chains with tens of thousands of potential failure points.

A single incident can trigger catastrophic ripple effects, paralyzing operations and inflicting severe financial damage. Interos data shows that large enterprises lose $34 million annually due to disruptions triggered by concentration risks.

Examples of at-risk goods and services include:


The world’s semiconductor manufacturing is concentrated in Taiwan, specifically at the Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corp (UMC). Any disruption to their operations, whether due to earthquakes and other natural disasters, geopolitical tensions, or other factors, could have severe ripple effects across global supply chains for electronics, automobiles, and other vital industries reliant on semiconductors.

Rare Earth Metals

China dominates the global supply of rare earth metals, which are critical components in many high-tech products, including smartphones, electric vehicles, and military equipment. Any disruption to China’s rare earth production or export policies could significantly impact global manufacturing and technology industries.

Global Shipping Chokepoints

A significant portion of global maritime trade passes through a handful of critical chokepoints, such as the Strait of Hormuz, the Strait of Malacca, and the Panama Canal – all of which have continue to grapple with disruptions triggered by geopolitical tensions, accidents, or natural disasters, could severely impact global supply chains and trade flows.

Strategies to Mitigate Concentration Risk

Addressing concentration risk requires a multi-faceted approach anchored in real-time supply chain lifecycle risk intelligence. Here are some practical strategies identify and mitigate concentration threats:

  • Comprehensive Supply Chain Mapping: Companies must gain multi-tier visibility into their supply chains to identify potential concentration risks and other threats. This involves mapping all suppliers and their interdependencies.
  • Predictive Risk Intelligence and Monitoring: Leveraging advanced risk analytics platforms like Interos, businesses can continuously monitor physical and digital supply chains for geopolitical, financial, cyber, regulatory, ESG, catastrophic, and other risks. Real-time alerts and predictive analytics enable proactive mitigation strategies.
  • Supplier Diversification: Reducing reliance on a single supplier or region by diversifying the supply base can mitigate concentration risk. However, this must be balanced against the potential increase in complexity and costs.
  • Nearshoring and Reshoring: Bringing production closer to end markets or back to domestic facilities can reduce exposure to geopolitical risks, trade tensions, and transportation disruptions.
  • Collaboration and Transparency: Fostering collaboration and transparency across the supply chain ecosystem can enhance risk visibility and enable coordinated risk mitigation efforts.

Addressing concentration risk and other supply chain vulnerabilities is not a one-time exercise but a strategic process that requires continuous monitoring, adaptation, and investment.

By prioritizing proactive and predictive supply chain technology like Interos, companies can fortify their operations against potential disruptions, safeguard their bottom line, and maintain a competitive edge.

Click here to learn how Interos can secure your supply chain against concentration risk and other threats.

by Julia Hazel and Dianna ONeill

While the dire outlook for the 2024 Atlantic hurricane season has raised alarms across the U.S., supply chain risk leaders focusing solely on this region are dealing with incomplete information.

Unlike 2023, the Pacific is expected to experience a relative reprieve from tropical cyclones this season. The complex climate dynamics impacting typhoons and hurricanes across the two oceans underscores the need for a global, seasonally-dependent assessment of catastrophic risks to supply chains.

The Looming Threat in the Atlantic

The National Hurricane Center’s unprecedented forecast is fueled by climatic conditions creating a perfect storm for intense hurricane development. However, an exclusive focus on this region alone risks overlooking critical threats to global supply chains posed by tropical cyclone activity elsewhere.

According to data from the World Bank, natural disasters in the East Asia and Pacific region caused over $60 billion in economic damages in 2021 alone, with a significant portion attributed to tropical cyclones disrupting supply chains.

Pacific Cyclones: An Underestimated Peril

In 2023, while the Atlantic saw 20 named storms, the remaining 58 tropical cyclones wreaked havoc across the Pacific and Indian Oceans, inflicting damage from China to Australia and Africa. The impacts of a single, powerful storm system can be immense:

  • Typhoon Doksuri, which ravaged Beijing and coastal China in July 2023, closed major ports and destroyed critical infrastructure, triggering $25 billion in U.S. economic losses according to Munich Re.
  • The technology sector has been heavily impacted by Pacific storms, with companies like Apple, Samsung, and Intel facing disruptions to their supply chains in recent years. In 2022, Super Typhoon Noru forced several semiconductor factories in Taiwan to temporarily halt operations, exacerbating the global chip shortage.
  • The automotive industry has also been battered by Pacific cyclones. In 2021, Typhoon Chanthu caused production stoppages at Toyota’s plants in Thailand, resulting in estimated losses of $98 million.

Regionally Tailored Forecasts

Interestingly, while the Atlantic is bracing for a historically active hurricane season, the forecasts for other regions paint a different picture. The outlooks for the Central and Eastern Pacific call for below-normal tropical cyclone activity, with NOAA anticipating a 50% chance of below-normal activity in the Central Pacific and 60% in the Eastern.

This divergence can be attributed to the effects of La Nina, which augments hurricane development in the Atlantic but has the opposing effect in the Pacific by increasing both vertical wind shear and atmospheric stability – conditions that suppress cyclone formation and intensification.

Comprehensive Catastrophic Risk Assessment

The stark disparity in this year’s forecasts across different regions of the world underscores the importance of businesses adopting a truly global, seasonally-dependent assessment of catastrophic risks to their supply chains. The threats posed by tropical cyclones are dynamic, shifting in both space and time depending on the season, the inherent risk profile of a given location, and continuously evolving climatic patterns.

To protect against these dynamic threats, organizations must gain greater visibility into their extended supply networks, identifying key suppliers situated in areas historically prone to natural hazards like hurricanes and tropical cyclones.

Moreover, they must continuously monitor how risk patterns shift across seasons and regions in real-time, using comprehensive supply chain lifecycle risk intelligence to proactively adjust mitigation strategies:

  • Interos’ catastrophic risk model provides a powerful solution to this complex challenge, offering a high geospatial resolution. This delivers more precise in-country and in-state risk indicators for faster and more focused hazard mitigation.
  • The technology enables businesses to proactively assess which suppliers are in areas susceptible to different natural hazards, as well as which specific hazard risks are likely to emerge during particular seasons.
  • The model’s continuous monitoring enables real-time tracking of supply chain impacts from unfolding natural events, empowering organizations to respond swiftly.

Consider the example of Cooper University Health Care. It used catastrophic risk intelligence from Interos to identify suppliers located in the path of Hurricane Idalia in 2023. By leveraging real-time catastrophic intelligence, managers were able to pre-position critical materials to ensure uninterrupted patient care.

As climate volatility and extreme weather become increasingly commonplace, embracing global, real-time hazard monitoring solutions like Interos’ catastrophic risk technology are crucial for proactively deterring and mitigating supply chain disruptions.

Click here to learn how Interos can secure your supply chain against extreme weather and other risks.


By Alberto Coria & Daniel Karns

Supply chain leaders are weighing the implications of a power shift affecting America’s largest trading partner. Over the weekend Mexico held its biggest election in history, electing Claudia Sheinbaum its first female president and granting her Morena party an apparent super-majority in Congress that could bring about policy changes.

Markets reacted warily in the immediate aftermath, with one global analyst noting that her victory, “opened the possibility of changes in the Constitution, which alters, or better put, deteriorates the risk balance of Mexico, causing capital to leave the country.”

Mexico surpassed China as America’s biggest trading partner last year. In addition to the political transition, the new administration faces multiple supply chain-related challenges:

Security Risks and Cargo Theft

High levels of violent crime could jeopardize the country’s supply chain stability through relatively common occurrences such as cargo truck hijackings. In 2022, the Mexican federal government reported 7,644 violent cargo truck hijackings—a 3% increase compared to 2021, however; the Transported Asset Protection Association (TAPA Americas) reported that 76,599 cargo truck hijackings occurred during President AMLO’s administration, according to their investigation. A stark contrast to the numbers provided by the federal government.

Major companies including Ford, DJI, Danone, Wal-Mart, Pepsi, and Coca-Cola, have all suffered losses due to stolen truckloads of merchandise in Mexico. The new president, Claudia Sheinbaum, is largely expected to continue AMLO’s approach of “hugs not bullets” for combatting the cartel while simultaneously empowering the military.

Energy Sector and Pemex

Mexico’s national oil company, Pemex, operates under a $102 billion USD debt burden, with the federal government reported to be considering absorbing up to $40 billion USD to assist the company in its ability to service debts. In the past, this debt has regularly affected Mexico’s oil output due to Pemex having to submit late payments to suppliers and alleged corruption within the company.

With the chronic mismanagement of Pemex affecting Mexico’s oil industry, the country’s overall oil production is now less than half of what it was in 2004, despite massive budgetary allocations from the federal government throughout various administrations. Sheinbaum has pledged to remove corruption from Mexico’s energy sector to increase oil production. Sheinbaum is expected to continue AMLO’s policies of leaning strongly on Mexico’s oil production for national revenue and is likely to continue heavily funding Pemex. Under a Sheinbaum administration, customers should not expect any major swings in Mexico’s energy policies.

Mexican Peso and Near-shoring

Mexico’s currency has risen 19% over the past twenty-four months to around 16.7 per USD, now one of the best-performing emerging market currencies due to low volatility and high interest rates. The Mexican Peso is also one of the few major currencies that have gained against the USD this year. This is largely due to the increase of foreign investment in the country through near-shoring and high levels of trade with the U.S.

Sheinbaum is seen as pro-business and is unlikely to enact any policies to deter the ongoing trend of near-shoring given its substantial boost to the Mexican economy. “Turmoil in the U.S.-China relationship has provided Mexico with a historic window to present itself as an alternative to China,” according to a statement from the U.S. Chamber of Commerce.

While the Sheinbaum administration faces significant challenges in addressing security concerns, managing the energy sector, and maintaining currency stability, the near-shoring trend is expected to continue, presenting opportunities for U.S. companies to strengthen their supply chains in Mexico.

Potential Industries at Risk 

Interos monitors supply chain lifecycle risk for some of the world’s largest public and private organizations. Our customers have extensive connections to Mexico-based suppliers, including heightened concentration risk for some sectors, such as chemical manufacturing, due to sub-tier supplier relationships.

The data below illustrates key sectors whose supply chains could be impacted by future administrative or policy shifts under Mexico’s new government.

  • In Tier 1
    • Total: 2,880
    • Top Industries
      • Merchant Wholesalers, Durable Goods
      • Transportation Equipment Manufacturing
      • Chemical Manufacturing
    • In Tier 2
      • Total: 16,251
      • Top Industries
        • Merchant Wholesalers, Durable Goods
        • Merchant Wholesalers, Nondurable Goods
        • Machinery Manufacturing
        • Chemical Manufacturing
      • In Tier 3
        • Total: 26,468
        • Top Industries:
          • Merchant Wholesalers, Durable Goods
          • Merchant Wholesalers, Nondurable Goods
          • Fabricated Metal Product Manufacturing
          • Machinery Manufacturing
          • Plastics and Rubber Products Manufacturing
          • Chemical Manufacturing
          • Transportation Equipment Manufacturing