Risk Desk tools
Spend concentration calculator
Enter what you spend with each supplier, and see how concentrated — or diversified — your supply base really is, using the same index regulators use for market concentration.
Formula
HHI = Σ (Supplier Share %)2
Supplier spend
₹
₹
₹
₹
₹
HHI score
0 / 10,000
Concentration band–
Top supplier share–
Total spend–
Spend share by supplier
An HHI below 1,500 suggests a reasonably diversified supply base, 1,500–2,500 suggests moderate concentration worth monitoring, and above 2,500 suggests spend is concentrated enough that a disruption at your top supplier would materially affect your total supply — the threshold at which qualifying a second source usually pays for itself.
Frequently asked questions
What is the Herfindahl-Hirschman Index (HHI)?
Calculated by squaring each supplier’s percentage share of total spend and summing the results — from near 0 for a diversified base up to 10,000 for a single supplier.
What HHI score counts as concentrated spend?
Below 1,500 suggests diversified, 1,500–2,500 suggests moderate concentration, and above 2,500 suggests concentrated spend worth a supply risk review.
Why does spend concentration matter?
Concentrated spend gives more leverage to fewer suppliers, and any disruption, price change, or capacity issue there hits a larger share of your total supply.
Is this spend concentration calculator free to use?
Yes. It runs entirely in your browser, needs no account, and nothing you enter is stored or transmitted.