What is the difference between automotive Tier1 and Tier2?
1 Answers
The differences between automotive Tier1 and Tier2 are as follows: 1. Scale: Tier2 companies are generally smaller in size with weaker technical capabilities compared to Tier1. Due to their limited production capacity, they hold less importance in the supply chain. Tier1 companies form the first link in the entire supply chain, driving the entire production process forward. This also means their production speed is crucial. Tier1 must also strictly ensure safety and compliance with relevant standards, with no defective products allowed to enter Tier1. 2. Operational process: In reality, OEM supply chains may be longer, but the Tier1 and Tier2 model reveals their operational workflow - Tier2 supplies products to Tier1, and OEMs use Tier1 products to manufacture final goods. The strength of a supply chain depends on its weakest link, making sound business management essential at every level.