TIER2-TIER3

Upstream automotive supplier chain.

Definition

Tier 2 supplies wiring, sensors, semiconductors, valves. Tier 3 supplies rolled steel, plastic, copper, rare earths. EDI communication often less formalised (basic PO+ASN). Tier N traceability visibility critical for EU CBAM and supply chain risk (chips shortage 2021-2023).

Origin

Terminology inherited from Toyota Production System and Porter analysis (1985).

Example in context

A Tier 2 (Murata) supplies sensors to Bosch (Tier 1), who integrates them in an ABS delivered to BMW (OEM).

Related terms

• OEM/Tier 1 — downstream chain.