The aerospace supply chain that facilitates production is a robust global system, encompassing the many entities that design and sell essential materials and commodities. The supply chain is broken down into three levels or tiers of suppliers, those of which ensure the continued operations of original equipment manufacturers (OEM) and the military alike. In this blog, we will discuss the various tiers of the aerospace supply chain and the entities that benefit from them, allowing you to better understand how the industry as a whole functions.
Within the realm of aerospace, OEMs are generally the military and aerospace contractors that produce the various aircraft models, aircraft components, weaponry, and space technology that cater to diverse applications. Across the globe, some of the biggest OEMs are those such as Lockheed Martin, Raytheon, BAE Systems, Northrop Grumman, Boeing, General Dynamics, and Airbus. While many entities may fulfill defense requirements for military operations, others may also work alongside private airline companies and private jet companies to bolster the civil aviation side. As a standard commercial airliner or large aircraft may be composed of millions of parts that come from thousands of tiered suppliers, it is crucial that the supply chain is well organized and functional.
Tier 1 Companies
Tier 1 suppliers and manufacturers are those that generally design and produce primary systems and components with the parts and subassemblies from Tier 2 suppliers. As such, the various products manufactured by Tier 1 manufacturers are the final systems that are provided to the OEM. Tier 1 manufacturers are often held up as the most important and viable members of the supply chain due to their offerings that include systems such as engines, landing gear, flight deck products, aerostructures, control systems, braking systems, electronic warfare systems, interior cabin products, and avionics. As the “pull” of the entire supply chain network, Tier 1 companies are subject to various government guidelines and are responsible for maintaining effectiveness and efficiency.
Tier 2 Companies
As stated before, Tier 2 companies are those that manufacture the various parts and assemblies that are used for Tier 1 manufacturing processes. As such, they still perform pivotal functions that ensure the effectiveness of the supply chain. Generally, Tier 2 companies fall below Tier 1 entities in terms of size and technology, though they still excel in sophisticated capabilities and operations. Similar to Tier 1 companies, Tier 2 companies rely on the entities below them for the means of receiving parts. In some instances, OEMs may even reach out to Tier 2 companies for their sourcing, that of which has increased over the years. Typically, Tier 2 companies are those that produce tires, aircraft aerofoil parts, missile nose cones, flight control airframe structures, and much more.
Tier 3 Companies
At the base of the supply chain, Tier 3 companies are tasked with manufacturing the many components that allow for critical parts and subsystems to be produced. Tier 3 manufacturers are crucial for the many operations of those above them, and they will produce items such as hydraulic fittings, high strength fasteners, instrumentation tubing, and other various aviation parts. While aircraft component production is a major aspect of such tiered companies, Tier 3 entities may also create the software that is used by computer hardware and networking devices.
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