Tier-N refers to the deeper layers of a company's supply chain beyond its direct suppliers (Tier-1 suppliers). Disruptions at these suppliers may impact your business by cascading through the supply chain, even if they are not directly connected to you.
Understanding Tier-N
Tier-1 vs. Tier-N
Tier-1 Suppliers: Direct suppliers that a company has a contractual relationship with
Tier-N Suppliers: Indirect suppliers further down the supply chain (Tier-2, Tier-3, and beyond). These can be raw material providers, sub-contractors, or component manufacturers
In the Feed, you have the possibility to separate the view between Tier-1 and Tier-N alerts by selecting the corresponding filters.
Tier-N Alerts
Alerts at this level assess risks affecting lower-tier suppliers that could have a cascading impact on the company's supply chain.
Example: A fire at a semiconductor factory (Tier-3 supplier) might not directly affect an automotive OEM, but could cause delays for Tier-2 and Tier-1 suppliers of electronic components, eventually disrupting production.
Here is an example of a Tier-N alert:
In this example you can see that the target affected is a Tier-3+ supplier, but may potentially affect the Tier-1 supplier.
Why Tier-N Monitoring Matters
Identifies hidden risks deep in the supply chain.
Prepares companies for disruptions before they affect direct suppliers.
Enhances supply chain resilience by providing early warnings on potential upstream issues.
How to set-up Tier-N mapping
Tier-N enabling a collection
The first step is to Tier-N enable a collection. You can activate Tier-N monitoring for a collection in the Network in the Collection details. The collection has to be added to “My collections” in order to set the check mark “Enable Tier-N Suppliers” on the right hand side.
After enabling the check mark, new settings will appear.
Delivery settings
Two new settings appear in the Delivery settings section.
Target priority
Target priority is used to set the target priority of the monitored tier-n suppliers. This can be used for example when the monitored tier-n suppliers are considered particularly critical, and the user wants to increase their priority in alerting.
Alert priority
Alert priority is used to filter alerts based on their priority. If for example “High and above” is selected for tier-2 alerts, only alerts with priority “High and above” are displayed for tier-2 suppliers in the Feed or emails.
Tier-N suppliers
The Tier-N suppliers section is used to define which tier-n suppliers are considered for monitoring. The user can include or exclude different data sources and set filters for these sources.
Max tiers
This defines how many tiers of the supply chain should be considered for monitoring. Increasing the number of tiers will increase the number of suppliers that are monitored.
Suppliers to consider
Tier-n data consists of different sources, and these sources differ in the scope of visibility:
Private: Any suppliers based on the user’s organization’s private tier-n data to be included in the monitoring.
Shared: Any suppliers based on data that your suppliers have shared with you in Prewave to be included in the monitoring.
Public: Any suppliers based on Prewave’s public supply chain graph to be included in the monitoring. This data can be further filtered in the “Sources” section.
Commodity Filter
The Commodity filter is an advanced filter that allows the user to filter your tier-n data based on a value chain structure. After filtering, only those suppliers that are relevant for the selected value chain are included for the monitoring. The Commodity Filter is described in detail in a separate article.
Sources
The tier-n data consists of different sources, and depending on the data source, there are different filtering options:
Customer: Any suppliers based on the user’s organization’s private tier-n data to be included in the monitoring.
Customs: Some countries make customs data on the company-level available to the public, and Prewave uses this data to construct the public supply chain graph.
Minimum shipments: Filter out buyer-supplier relationships where less than the defined amount of shipments have been shipped.
Shipments timeframe: Filter out buyer-supplier relationships where the latest shipment hasn’t taken place in the defined timeframe.
Media: Prewave scans media data for buyer-supplier relationships in a similar way as it does to find alerts. You can choose to include the buyer-supplier relationships identified in the media data into the tier-n monitoring.
PrewavePrediction: Prewave has a proprietary model predicting buyer-supplier relationships based on companies' broader sourcing patterns, relevant commodities and geographical distance.
Minimum probability: The outcome of the prediction model is a probability of the relationship, and the user can choose how high of a probability is desired. Choosing a higher probability will lead to less predicted suppliers to be added into the monitoring.
Optimal filter settings
Optimal filter settings depend on the user's organization’s risk tolerance and the capacity to act based on the alerts. Looser filters (e.g. lower Minimum shipments value) lead to more suppliers being monitored, and stricter filters (e.g. higher Minimum shipments value) lead to less suppliers being monitored.
Monitoring less suppliers is more efficient because less alerts need to be processed, but it could mean that some risks go unnoticed. Therefore, defining very loose filters can be considered as risk-averse behavior, and very strict filters as risk-seeking behavior. However, very loose filters might not be feasible because they might lead to too many alerts. Each organization must find a balance between the level of risk they are willing to tolerate and the capacity for follow up action based on the risk alerts.
The commodity filter is recommended because it is tailored to a specific value chain and will help achieve a balance between no essential information missed while keeping the volume of alerts manageable. Getting the best results with the commodity filter requires setting up the collection according to commodities.
Save or Reset
Once the settings have been adjusted to your liking, they must be saved using the “Save” button. The “Reset” can be used to restore the settings to the status after the last saving.
After a collection has been successfully Tier-N enabled, the following symbol appears next to its name in the collections menu, and the alerts can be viewed in the feed according to the selected settings.