What type of supplier is referred to as a tier one supplier?

A tier one supplier is defined as a supplier that provides components or materials directly to the Original Equipment Manufacturer (OEM). This type of supplier plays a critical role in the supply chain, as they are often responsible for delivering high-quality, specialized components or assemblies that are essential for the production of the final product.

In many industries, such as automotive or technology, tier one suppliers have a direct relationship with the OEMs, which allows for closer collaboration in design, production schedules, and quality assurance. This relationship is vital for the efficiency and effectiveness of the manufacturing process, as tier one suppliers must understand the OEM's needs and specifications to ensure compatibility and reliability.

Understanding the distinction of tier one suppliers helps in recognizing the structure of the supply chain. While there are various levels of suppliers (tier two, tier three, etc.), the tier one supplier serves as a primary partner for OEMs, making their role particularly significant in the supply chain hierarchy.