Establishing a proper, efficient and operationally sound supplier structure is critical for a company. In this context, a so-called system supplier takes over the provision of complex assemblies or parts as a supplier of the first degree (tier 1 supplier). A classic example of the work of system suppliers is the automotive industry, where, for example, complete transmissions or parts of the interior come from one and the same provider or supplier. The same applies in this context to the engine, i.e. central systems or modules of a complex end product.
Requirements for a system supplier
A system supplier stands for the production of highest order assemblies based mainly on multi-part functional groups. Unlike the counterpart, the so-called module suppliers, a certain expectation is set or high demands are placed on the quality of such assemblies:
- Clear demarcation in the mode of operation
- High degree of complexity
- High degree of integration
- High degree of innovation
Important: The system supplier takes over both the planning and the development and procurement of product groups, as well as their production and delivery - quality controls included. A company that relies on such system suppliers thus makes use of external competence and know-how and at the same time places itself in an existential dependency on this company.
A so-called original equipment manufacturer, also known as an OEM manufacturer (Original Equipment Manufacturer), secures cost advantages in particular by commissioning a system manufacturer. Synergies can be created through a high degree of specialization and, depending on the industry, the complete outsourcing of entire assemblies or product components. The system supplier's extremely high in-house development performance sets it apart from the module or parts supplier.