Tiering can dramatically reduce the number of supply relationships a company must manage.

Question

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Tiering in supply chain management involves organizing suppliers into different levels or tiers based on their role, importance, or the complexity of the supplied goods and services. This approach can streamline operations and reduce the complexity of managing numerous direct supplier relationships by consolidating them into manageable tiers, where only top-tier suppliers are directly managed, and lower-tier suppliers are managed indirectly.

Tiering Can Dramatically Reduce the Number of Supply Relationships a Company