In the past 25 years, major original-equipment manufacturers around the world have shifted to the Japanese tiered approach to supply chains. They’ve radically reduced the number of suppliers

that they directly manage and off-loaded responsibility for supervising the rest, along with the task of building major subsystems, to a handful of first-tier suppliers. The attractions for

OEMs were faster new-product introductions, larger volume discounts, reductions in the capital and risks associated with developing and producing the subsystems, and the ability to spend

less management time on overseeing the multitude of lower-tier suppliers and more on building core competencies.