Almost every small business has at least one supplier that would take weeks to replace. It is usually not the biggest one by spend. It is the specialist part, the single roaster, the one contractor who knows the site, or the software nobody else can support. Finding that supplier before they fail is a two-hour job.
How to find your real single points of failure
- List every supplier that touches something you sell or something you cannot trade without.
- For each, ask how long it would take to switch, in days.
- Anything over two weeks is a single point of failure, regardless of how much you spend with them.
- Check whether two of your suppliers depend on the same third party, such as one freight route or one manufacturer.
The Queensland version of this problem
Freight is the recurring one. A Bruce Highway closure north of Rockhampton, or flooding on inland routes, cuts businesses off from suppliers who are otherwise perfectly reliable. The supplier has not failed. The road has. Plans that only consider supplier insolvency miss the far more common cause.
"Your supplier being fine is not the same as your delivery arriving."
What to do about it, cheaply
- Open an account with a second supplier now, even if you never order from them. An account that already exists can be used the same day.
- Hold a small buffer of the one item that would stop you trading, not of everything.
- Get a written lead time from your main supplier, so your own customer promises are grounded in something.
- Ask your main supplier what their own backup is. The answer is informative either way.
- Record the alternative in your plan with a name and number, not just a company.
Worked example: a Townsville workshop
A ten-person mechanical workshop found that 60 per cent of its parts came through one Brisbane distributor with a two-day freight run. When the highway closed for four days, jobs stalled and customers waited. Afterwards the owner opened an account with a north Queensland distributor at slightly higher prices and kept a fortnight of the six fastest-moving parts on the shelf. The next closure cost them half a day instead of four.
Common mistakes
- Judging supplier risk by spend rather than by replacement time.
- Assuming a second supplier can be found on the day. Onboarding, credit checks and minimum orders all take time.
- Holding buffer stock of everything, which ties up cash without reducing the real exposure.
- Forgetting service suppliers such as IT, payroll and waste, which stop the business just as effectively as parts.
How much buffer stock should a small business hold?
Enough of the items that stop trade to cover the realistic replacement time, not a blanket percentage across the catalogue. For most businesses that is a handful of lines and a modest amount of cash, which is why identifying the right items matters more than the volume.
Should I tell my supplier I am setting up an alternative?
Usually yes. Sensible suppliers understand it, and the conversation often surfaces useful information about their own capacity, lead times and contingency arrangements.
Related reading: Brisbane 2032 and your supply chain, how to build a risk register and our industry guides.
The dependency map in the app shows which activities rely on which suppliers, so a single point of failure is visible before it costs you a week.
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