OEM

Related terms

Tier 1

Tier 1 is the supplier level that sells components or systems directly to an OEM, such as a seat, brake, or wiring harness maker selling to an automaker. Tier 1 suppliers manage their own sub-tier suppliers and carry OEM quality requirements down to them.

Tier 2

Tier 2 is the supplier level that sells parts to a Tier 1 rather than directly to the OEM, such as a stamper or molder supplying brackets to a seat maker. Tier 2 suppliers usually work to the Tier 1's flowed-down requirements, including PPAP and often IATF 16949.

Contract manufacturer

A contract manufacturer is a company that builds parts or finished products to another company's design, sold under that company's brand. Some make components; others do full box builds with assembly, testing, and packaging. The customer owns the design, and the contract manufacturer owns the process.