How Z2Data Helps Companies See Beyond Their Tier 1 Suppliers

Article Highlights:

• Supply chain visibility refers to a business’s ability to see into all variables that make up their supply chain. Sub-tier supply chain visibility is the capacity to see all those variables—suppliers, sites, parts, and events—within your tier two, tier three, and beyond. 
• By drawing on sub-tier visibility and the transparency it creates, companies can embrace a more proactive approach to their risk management efforts. Once this is achieved, there are a slew of strategies that organizations can adopt to preemptively mitigate the impacts of sub-tier events and disruptions.
• Z2Data’s sub-tier intelligence combines large internal datasets with cutting-edge underlying technology to aid businesses in expanding their visibility well beyond tier one suppliers. The SCRM solution also draws on AI and machine learning to normalize millions of data points and classify parts based on taxonomy and commodity. 

For a long time, the majority of original equipment manufacturers (OEMs) and other businesses focused almost exclusively on their direct suppliers. OEMs had direct, one-on-one relationships with these tier one manufacturers, and it seemed logical to rely on them for information, intelligence, and insights into the vast sub-tier manufacturing networks where they sourced their materials and parts. 

Then the 2020s arrived, bringing the COVID-19 pandemic, major supply chain shortages, and geopolitical conflict across multiple regions of the world. These global developments triggered disproportionately high numbers of disruptions and facility shutdowns, as well as major financial losses for manufacturers. And while the first few years of the decade and the developments they ushered in were painful, they also showed companies the importance of a comprehensive supply chain risk management (SCRM) framework that provides real-time, continuous sub-tier visibility. Suddenly, OEMs realized that managing risk in their supply chains was about more than just their direct, everyday suppliers. It was about achieving greater transparency—and therefore greater control—throughout supplier networks that went three, four, or even five tiers deep.

Despite these stark lessons, however, most companies’ visibility still stops at their tier one suppliers. According to supply chain management firm GEODIS, only 6% of companies report having full, end-to-end supply chain visibility. Research conducted in 2024 by McKinsey, meanwhile, found that only 30% of businesses have supply chain transparency beyond tier one—a decrease of seven percentage points from the previous year. 

What Is Sub-Tier Supply Chain Visibility?

Supply chain visibility refers to a business’s ability to see into all variables that make up their supply chain, including:

• Direct and sub-tier suppliers
• Manufacturing sites
• Products, parts, and materials
• Disruptions

According to SAP, supply chain visibility is the “strategic capability to monitor every component of the supply chain from end to end. By providing real-time insights into inventory levels, shipment status, production schedules, and warehouse management, enhanced visibility can help you create a more responsive and resilient supply chain to better manage the unpredictability inherent in global markets.” 

In order to achieve the type of comprehensive visibility that bolsters resilience and lays the foundation for proactive supply chain risk management (SCRM), businesses need to be able to access their sub-tier suppliers. Sub-tier supply chain visibility is the capacity to see all those above-mentioned variables—suppliers, sites, parts, and events—within your tier two, tier three, and beyond. 

In order to achieve the type of comprehensive visibility that bolsters resilience and lays the foundation for proactive supply chain risk management (SCRM), businesses need to be able to access their sub-tier suppliers.

Why Sub-Tier Visibility Is Now a Strategic Imperative 

The 2020s have cogently demonstrated the importance of businesses seeing deep into their supply chains. For technologically sophisticated industries that produce products with hundreds of parts, any bottleneck at a single node in their manufacturing networks can trigger a domino effect that leads to a business’s direct suppliers. These supply chain bottlenecks can include everything from shortages to shutdowns to compliance violations, and they’re capable of impacting suppliers all over the world. The one common thread, however, is their capacity to cascade across global supplier networks, derailing production downstream, all the way to the original equipment manufacturer (OEM).

Sub-tier visibility gives organizations the ability to identify these risks—and the questionable entities that pose them—ahead of time. By drawing on sub-tier visibility and the transparency it creates, companies can embrace a more proactive approach to their risk management efforts. Once this is achieved, there are a slew of strategies that organizations can adopt to preemptively mitigate the impacts of sub-tier events and disruptions.

• Supplier Designations: Organizations that map their sub-tier can eventually create “preferred” vs. “nonpreferred” designations for their suppliers.  These categorizations are often based on geopolitical risk: companies headquartered or with operations in China or Russia, for example, might be designated as “nonpreferred,” while manufacturers based in the U.S. would be “preferred.” These designations can help OEMs quickly select between competing suppliers, while also gradually transitioning their supply chain away from higher-risk entities, toward a more stable, low-risk manufacturer network.

• Dual Sourcing: Dual sourcing is the practice of relying on two or more suppliers for specific parts, subassemblies, and products. The term is also often referred to as “splitting.” OEMs that have identified their sub-tier suppliers, and subsequently deemed some of them to be medium- or high-risk, can initiate dual sourcing practices to mitigate the impact of future disruptions. In the case of splitting, this might look like sourcing the same product from multiple suppliers, dividing orders in 70/30, 60/40, or 90/10 allocations.

• Switching Suppliers: In circumstances where a sub-tier supplier identified through supply chain mapping is determined to be high-risk, with few options for neutralizing or even mitigating the threat, OEMs may consider switching to another supplier altogether. While this is often considered a worst-case scenario, it’s also one that’s justified when an organization identifies a high-risk entity in their supply chain and can’t devise an effective mitigation strategy for them. At that point, it’s only a matter of time before that manufacturer triggers a significant disruption, and swapping out the risky supplier for a safer alternative is a strategic imperative. 

How Z2Data Extends Your Supply Chain Visibility 

Supply chain risk management (SCRM) company Z2Data provides businesses in industries like electronics, automotive, cybersecurity, and aerospace and defense with best-in-class multi-tier supply chain visibility. Z2Data’s sub-tier intelligence combines large internal datasets with cutting-edge underlying technology to aid businesses in expanding their visibility well beyond tier one suppliers. In addition, the SCRM solution draws on AI and machine learning to normalize millions of data points and classify parts based on taxonomy and commodity. 

Below, we’ve summarized four key facets of Z2Data’s Sub-Tier Intelligence capability.

Sub-Tier Database

Z2Data maintains a large internal database of supplier relationships, including both direct suppliers and sub-tier manufacturers that go two, three, and even four tiers deep. Research teams use verifiable, high-credibility data to develop structured supply chain networks. These mapping networks are guided by taxonomy and commodity content, helping to automatically strip out irrelevant connections that only add data noise. 

For businesses using Z2Data, this means expansive out-of-the-box coverage multiple tiers deep—before companies even start collecting their own data and feeding it into the SCRM platform. Z2Data’s proprietary database is a key distinguishing feature from many competing platforms, which are often little more than empty shells entirely reliant on customer data.

For businesses using Z2Data, this means expansive out-of-the-box coverage multiple tiers deep—before companies even start collecting their own data and feeding it into the SCRM platform.

FMD-Level Analysis

Part of Z2Data’s unique approach to sub-tier intelligence is its focus on full material declaration (FMD) analysis. Research teams review FMDs—including parts, MPNs, and material composition—to carry out multi-tier mapping that establishes a part or product’s path from raw materials to finished product. By focusing on FMDs, rather than direct suppliers, Z2Data is able to provide a more customized, granular picture of manufacturing networks. 

Intuitive Data Visualizations

The best supply chain data is intuitive and easy to understand. To that end, Z2Data uses clear, easily comprehensible diagrams that show supply chain flows, from raw material providers to sub-tier manufacturers to direct suppliers. Users can access these diagrams directly from the tool, giving them a vivid way of conceptualizing their supply chain and all the relationships that keep it intact. 

Risk Sensing

Once sub-tier suppliers are identified and a more comprehensive supply chain map is established, businesses can use Z2Data to carry out detailed risk assessments. They can quickly assess for:

• Sanctioned or restricted entitled, based on dozens of domestic and international sanctions lists.
• Forced labor exposure within sub-tiers.
• Companies that are state-owned or linked to foreign militaries. 
• Entities with known legal, regulatory, or ESG concerns.

The Criticality of Sub-Tier Visibility to SCRM

Proactive supply chain risk management relies on multi-tier visibility. Companies only able to see their tier one suppliers have no way of evaluating sub-tier manufacturers, assessing risk, or implementing mitigation strategies to bolster their supply chain resilience. Those organizations that have achieved sub-tier supply chain visibility, on the other hand, have the data and insights crucial to maintaining an agile, highly responsive posture within their value chains. 

Z2Data’s sub-tier intelligence combines vast internal databases with human expertise and AI efficiency to rapidly extend businesses’ visibility. In confirming supplier relationships and establishing manufacturing networks, Z2Data researchers use only the highest-quality sources, including: 

• Company websites
• Corporate filings
• Trade data (including from the U.S., India, China, and Singapore)
• Sustainability reports
• Product documentation and brochures
• Supplier awards
• Independently conducted supplier surveys.

The result is reliable, illuminating sub-tier mapping that can inform an effective SCRM program and the strategies it utilizes. To learn more about Z2Data and how its sub-tier intelligence can help businesses map FMDs to manufacturers, identify risky entities, and see deep into their supply chains, schedule a free trial with one of our product experts.