Strategic Supply Chain Research Framework
ACTIONABLE GENERALIZATIONS:
- What are points of maximum volatility?
- What are points of maximum fragility? (Chokepoint, bottleneck)
- Where does AI change the external industry landscape in the medium term future?
- Where does AI change the internal operating models most in the medium term future?
- How large is the opportunity (in terms of both TAM and WTP of prospective customers)?
I. Physical & Network Structure
A. Supply Chain Stages
| Stage | Key Activities | Representative Firms | Capital Intensity (L/M/H) |
|---|---|---|---|
| Raw materials | |||
| Processing/refining | |||
| Core manufacturing | |||
| Subsystems/components | |||
| Final assembly | |||
| Distribution/end markets |
B. Network Topology
- Approx. number of tiers:
- Hub-and-spoke or distributed?
- Where is complexity concentrated (upstream/downstream)?
- Any serial dependencies (where one failure halts entire chain)?
C. Concentration & Fragility
- Top 3 firms by critical stage:
- % of global capacity controlled by top 3:
- Single points of failure:
II. Geographic & Political Topology
A. Geographic Distribution by Stage
| Stage | Main Countries | % Global Share | Political Risk Level (L/M/H) |
|---|---|---|---|
| Raw materials | |||
| Processing | |||
| Manufacturing | |||
| Assembly |
B. Political & Trade Exposure
- Export controls affecting this industry:
- Sanctions or embargo risk:
- Ally vs rival dependency:
- Exposure to chokepoints (straits, ports, etc.):
III. Capital, Time & Scale Dynamics
A. Capital Structure
- Typical capex per facility/unit:
- Asset specificity (low ↔ high):
- Financing structure (private/state/mixed):
B. Time Structure
- Time-to-build new capacity:
- Time-to-repurpose existing capacity:
- Typical asset lifespan:
C. Scaling Properties
- Modular or lumpy expansion?
- Minimum efficient scale:
- Bottlenecks to rapid scaling:
IV. Technology & Substitutability
A. Input Substitutability
| Input | Alternative Sources? | Switching Cost (L/M/H) | Notes |
|---|---|---|---|
B. Technology Lock-in
- Open vs proprietary standards:
- Degree of IP concentration:
- Interoperability challenges:
C. Technological Uncertainty
- Pace of obsolescence:
- Risk of dominant paradigm shifts:
V. Economic & Incentive Structure
A. Unit Economics by Stage
| Stage | Typical Margins | Volatility | Who Bears Risk? |
|---|---|---|---|
B. Incentive Misalignments
- Where private ROI diverges from system resilience:
- Who underinvests in redundancy and why:
- Externalized risks (onto states, consumers, etc.):
C. Market Failures Observed
- Coordination failures:
- Information asymmetries:
- Underpriced risks:
VI. Governance & Policy Environment
A. Degree of State Involvement
| Area | Low | Medium | High | Notes |
|---|---|---|---|---|
| Subsidies | ||||
| Regulation | ||||
| Industrial policy |
B. Key Policies Affecting the Chain
- Domestic:
- Foreign:
- Anticipated policy changes:
C. Coordination Mechanisms
- Public-private partnerships?
- International coordination?
- Fragmented vs centralized governance?
Risk/Opportunity Analysis
Risk Categories
- Node Risks (Localized Failures): Risks tied to specific firms, sites, or technologies.
- Link Risks (Connectivity Failures): Risks in relationships and flows between nodes.
- Correlated Risks (Systemic Failures): Risks that affect many nodes simultaneously.
- Temporal Risks: Risks arising from time mismatches (e.g. demand spikes)
Opportunity Levers
Structural Levers (Change the Network)?
- Supplier diversification
- Vertical integration
- Geographic reshoring/friendshoring
- Modularization
Operational Levers (Optimize How It Runs)
- Inventory buffers
- Dynamic routing
- Dual sourcing
- Flexible production scheduling
Financial Levers (Change the Cash Flows)
- Hedging
- Long-term contracts
- Capacity reservation agreements
- Risk-sharing contracts
- Insurance
Strategic Levers (Change the Game)
- Joint ventures
- Standard-setting
- Pre-competitive consortia
- IP pooling
Policy Levers
- Subsidies
- Export controls
- Strategic stockpiles
- Mandates