FAQs
Supplier pyramid in procurement logistics
What is a tier 1 supplier? ›
Tier 1 Suppliers are your direct suppliers. Tier 2 suppliers are your suppliers' suppliers or companies that subcontract to your direct suppliers. Tier 3 suppliers are the suppliers or subcontractors of your tier 2 suppliers.
What is a supplier to a tier 1 supplier called? ›
Solved A supplier to a Tier One supplier is called a OEM - | Chegg.com.
What is a first tier supplier in supply chain? ›
Tier 1 suppliers are arguably the most important of all the tier suppliers for any business, as tier 1 suppliers are the only suppliers that a business will directly communicate with. This isn't to say that the other tier suppliers aren't important – any part of a supply chain is essential to manufacturing any product.
What is an example of a first tier supplier? ›
Take, for example, a company selling apparel: The factory that assembles that company's cotton t-shirts is a Tier 1 supplier. TIP: If you're looking to identify your Tier 1 suppliers quickly, look at your company's spending—Tier 1 suppliers are often significant cost centers.
What is a Tier 1 supplier quizlet? ›
- Tier 1 suppliers are the primary suppliers to retailers.
What is meant by Tier 1? ›
(2) The top level. A Tier 1 city is one of the major metropolitan areas in a country. A Tier 1 vendor is one of the largest and most well-known in its field. However, the term can sometimes refer to the bottom level or first floor.
What is a 1st tier supplier vs 2nd tier? ›
However, it is often the responsibility of tier 1 suppliers to guarantee quality products and services meet all requirements — both in terms of design and specifications. Tier 2 suppliers are usually smaller companies specializing in specific supply chain areas.
What is a Tier 1 and tier 2 diverse supplier? ›
Tier 1 diverse spend is when an organization works directly with a diverse supplier, while Tier 2 spend is when an organization has a supplier diversity program that requires its prime suppliers to work directly with a diverse company.
What is a first tier customer? ›
First tier customers: Those customer who directly receive goods and services from operation. Second tier customers: Those customers who receive goods and services from customers of operation.
A supply pyramid describes the structure of a supply chain with the end product producer at the top. The end product producer is referred to as an OEM, which stands for Original Equipment Manufacturer. The suppliers of modules and systems are directly underneath the OEM.
What is difference between Tier 1 and 2? ›
Financial planning in India focuses on retirement planning. The National Pension System (NPS) offers Tier 1 as the primary retirement fund account with a lock-in period, while Tier 2 provides flexibility for withdrawals. Tax benefits are available for NPS Tier 1 contributions under Section 80C and for annuities.
What are the 4 supplier categories? ›
ITIL recommends grouping suppliers into the four previous mentioned categories: strategic, tactical, operational, and commodity. Organizations will benefit by defining scope around the different categories of suppliers and conducting supplier management activities with respect to the type of supplier.
What tier supplier is the riskiest in terms of working conditions and regulations? ›
Our data show that lower-tier suppliers pose significant environmental and social risks and, thus, have a greater need to embrace sustainability. Ironically, however, these are the least monitored, least equipped, and least regulated companies.
Is a first tier supplier upstream from a second tier supplier? ›
The correct answer is: a second-tier supplier is downstream from a first-tier supplier.
What are Tier 1 and Tier 2 suppliers? ›
Tier 1 Suppliers: These are direct suppliers of the final product. Tier 2 suppliers: These are suppliers or subcontractors for your tier 1 suppliers. Tier 3 suppliers: These are suppliers or subcontractors for your tier 2 suppliers.
What is considered Tier 1 and Tier 2? ›
Tier 1 and tier 2 capital are two types of assets held by banks. Tier 1 capital is a bank's core capital, which it uses to function on a daily basis. Tier 2 capital is a bank's supplementary capital, which is held in reserve.
What is Tier 1 vs OEM? ›
Here, the original equipment manufacturer (OEM) is at the top of the supply chain pyramid. A tier 1 vendor is a company that is a direct supplier for an OEM. The tier 1 vendor will supply independent parts in the automotive sector, such as motors, car seats, brakes, etc.