First-tier suppliers

Employing witness auditors sponsored by the vehicle manufacturers and first tier suppliers to verify that the scheme is working effectively... 

Your subcontractors may not need to supply product approval submissions for all parts they supply but there are situations where subcontractor product approval submissions are required. For example, GM requires product approval of all commodities supplied by subcontractors to first tier suppliers. The standard does point out that suppliers are... 

One approach for promoting information sharing is the formation of supplier associations and the cross-holding of shares with supplier-group firms and between first-tier suppliers. Another is the two-way sharing of personnel with Toyota and between supplier-group firms. 

As described earlier, there is extensive delegation between the OEMs and the first-tier supply base for produa designs. In addition, the same supplier may occupy different positions across tiers for example a first-tier subcontractor to Honda may be a second-tier subcontractor for Nissan. Similarly a second-tier subcontractor to Nissan may be a first-tier supplier to Hitachi for computer components. This su ests that the tiered supply base is linked across many OEMs and products, thus generating an Alps structure. 

Erigant V (2007) Between internationalisation and proximity the intemationalisatirai process of automotive first tier suppliers. Research group on theoretical and applied economics GREThA UMR CNRS 5113. Pessac, France... 

The case example involves three individual companies representing a brand owner (manufacturer), a first tier supplier and a second tier supplier. The target is to build a lean and transparent business model in a three-entity demand chain. 

A selected starting point for this example is that the collaborative forecasting model exists already between two parties and this model is extended one step further. In a two-entity chain the forecast of the customer affects the supplier. In this example, where the second tier supplier is included the initial forecast of the brand owner affects another step higher in the upstream. Furthermore, the planning process of the first tier supplier, where the manufacturer s forecast is processed into raw material forecast to the second tier supplier, plays a key role. A general description of the model is shown in Figure 2.2. 

As the collaborative forecasting between the manufacturer and the first tier supplier is already in place, the key metrics between them is treated as the best practice when defining the targets for the second tier supplier with the first tier supplier. 

The new business model reduces the inventory levels and increases the inventory turnover in the second tier supplier/first tier supplier part of the demand chain. Other expected benefits are less out-of-stocksitua-tion, less non-optimal transports, better planning and production efficiency at the second tier supplier and increased customer satisfaction. 

The main weakness of the supply chain lies in the fact that in spite of the effective collaboration between car makers and first tier suppliers international best practices are not permeating down to the second or third tier suppliers. 

In the automobile industry most of the volume car manufacturers have established seamless processes with their first tier suppliers based upon providing immediate access to production plans and schedules. This enables just-in-time deliveries to be achieved without the need for major buffers of inventory at the first tier level,... 

There is in many companies an amazing lack of awareness of the wider supply/ demand network of which the organisation is a part. Whilst there is often a good understanding of the downstream routes to market, the same is not always true of what lies upstream of first tier suppliers. First tier suppliers are often dependent themselves on second and even third tier suppliers for their continuity. 

Given the complexity of most supply networks, how can risk be better managed upstream and downstream of the focal firm Ideally, if each entity in a network took responsibility for implementing risk management procedures of the type advocated here with their immediate first tier suppliers and customers then a far more resilient supply chain would emerge. 

This characterization of a Ptindpal-Agent-Relatiotrship allows the irrterpretation of a supply network as a set of Ptincipal-Agent-Relatiotrships (Fig. 15.1). Starting at the end of the supply chain, the companies with direct access to the customers are to be seen as principals ( P ). Companies at the first tier supplier level are... 

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