The Procurement Glossary » Second-Tier Supplier

Second-Tier Supplier

Suppliers & Vendors

Definition

A supplier to your supplier — one step removed in the supply chain from the buyer.

Explanation

Risk and disruption often originate below the first tier. Understanding second- and lower-tier suppliers (sub-tier visibility) is essential for managing hidden dependencies, single points of failure and compliance in extended supply chains.

Example

A shortage at a second-tier chip maker halts the first-tier supplier, exposing a hidden dependency.

Related terms

• Supply Chain — The end-to-end network of organisations, people, activities and resources that move a product from raw material to end customer.
• Supply Risk — The risk that supply of a good or service is disrupted, constrained or made more costly.
• Sub-Tier Visibility — Insight into the suppliers beyond your direct (first-tier) suppliers, deeper into the supply chain.
• Supplier — An organisation that provides goods or services to a buyer in exchange for payment.

Frequently Asked Questions

What is Second-Tier Supplier?

A supplier to your supplier — one step removed in the supply chain from the buyer. Risk and disruption often originate below the first tier. Understanding second- and lower-tier suppliers (sub-tier visibility) is essential for managing hidden dependencies, single points of failure and compliance in extended supply chains.

Can you give an example of Second-Tier Supplier?

A shortage at a second-tier chip maker halts the first-tier supplier, exposing a hidden dependency.

Back to the procurement glossary | Procurement concepts | Contact us