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Sourcing & Suppliers

Tier 1 Supplier

A tier 1 supplier is a supplier that sells directly to the buyer, sitting at the first level of the supply chain.

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Tier 1 suppliers are the organisations a buyer contracts with and receives goods or services from directly. They may themselves be manufacturers, distributors or assemblers who in turn rely on their own suppliers further upstream. Because tier 1 relationships are direct, they are usually where a buyer's contracts, performance management and day-to-day communication are focused.

Understanding the tiers matters because risk and cost often sit below tier 1. A reliable tier 1 supplier can still be exposed to problems at its own suppliers, so mature procurement functions seek visibility beyond the first tier for critical categories. Mapping which tier 1 suppliers depend on shared upstream sources helps reveal hidden concentration risk.

Frequently asked questions

What is a tier 1 supplier?
A tier 1 supplier is one that sells directly to the buyer, sitting at the first level of the supply chain, and is usually where a buyer's contracts and performance management are focused.
Why look beyond tier 1 suppliers?
Significant cost and risk often sit further upstream; a dependable tier 1 supplier can still be disrupted by problems at its own suppliers, so visibility into lower tiers matters for critical categories.

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