OEMs, Primes, and Tier 1's - How the Aerospace Supply Chain Really Works

If you spend any time around Aerospace, you’ll hear the same terms come up again and again:

OEM

Prime

Tier 1

Tier 2

They’re used in meetings, written into contracts, and referenced in requirements - often without much explanation.

And on the surface, they sound straightforward. Just labels. Just positions in a supply chain.

But if you’re a business looking to move into Aerospace - or move further up within it - these terms carry far more weight than most realise.

Because they don’t just describe where you sit.

They define:

• Who you can sell to

• What standards you must meet

• How much trust is placed in your business

• And ultimately, whether you’re even allowed to compete

  
  

The Structure Everyone Talks About

At the top of the Aerospace supply chain sit the OEMs - Original Equipment Manufacturers.

These are the organisations designing and building aircraft, engines, and major systems. Companies like Airbus and Boeing for example.

They are responsible for the final product. The aircraft that flies. The system that performs. The outcome that must work - every time.

Below them are the Primes.

These are the major contractors delivering large scale programmes, often into defence and government. They manage complexity at scale - pulling together thousands of components, systems, and suppliers into a single deliverable.

Then come Tier 1 suppliers.

These businesses work directly with OEMs or Primes. They don’t just supply parts - they deliver complete assemblies, systems, or critical components. They are deeply embedded in the supply chain and carry significant responsibility.

Below that, you have Tier 2 and Tier 3 suppliers.

This is where most businesses we work with sit:

• Precision engineering companies

• Manufacturers

• Distributors

• Specialist service providers

  
  

Highly capable organisations, often with strong reputations in their own sectors.

What the Structure Doesn’t Tell You

The Aerospace supply chain isn’t built on capability alone. It’s built on risk control.

Every decision made by an OEM or Prime is influenced by one question:

“Can we trust this supplier to deliver, consistently, without introducing risk into the system?”

That risk isn’t theoretical, it’s:

• Safety risk

• Compliance risk

• Financial risk

• Reputational risk

  
  

And because OEMs and Primes can’t directly control every supplier, they do something critical, they push that responsibility down the chain.

How Requirements Actually Flow

If you’re supplying into Aerospace - even indirectly - expectations don’t stop at Tier 1, they cascade from OEM…to Prime…to Tier 1…to Tier 2…to Tier 3… until they reach you.

That’s why businesses often find themselves facing requirements that feel disproportionate to the work they’re doing:

• AS9100 or AS9120 certification

• Full traceability of materials and components

• Approved supplier lists and monitoring

• Documented processes

• Internal audits

• Risk-based thinking

• Cyber Essentials+

• JOSCAR Registration

  
  

At first glance, it can feel excessive, but from the perspective of the OEM, it makes complete sense. There needs to be control within the supply chain, and these standards to along way to enforcing that contol.

Where Most Businesses Get Stuck

This is the point where many businesses step back, not because they can’t do the work, but because they assume they’re not ready.

They look at Aerospace requirements and think:

• “We’d need to change everything”

• “We’re not that kind of business”

• “That’s for bigger companies”

  
  

In most cases, that assumption is wrong, what we consistently see is this:

Most engineering and distribution businesses already operate at around 70–80% of what Aerospace requires. They:

• Deliver quality products

• Manage customers effectively

• Work with suppliers every day

• Solve problems as they arise

  
  

The capability is there, what’s missing is something less obvious.

The Real Gap: Structure and Proof

From inside the business, everything makes sense, but from the outside, it often doesn’t.

That’s the gap.

If an external auditor - or a Tier 1 supplier - asked:

• How do you know your suppliers are reliable?

• How do you ensure only conforming products are released?

• What happens when something goes wrong?

• How do you know your processes are being followed consistently?

• 
  

Most businesses can answer those questions, but can they demonstrate it?

Can they show:

• A defined process

• Consistent application

• Recorded evidence

• Ongoing review

  
  

Because in Aerospace, saying it isn’t enough, you have to prove it.

Why Standards Exist (And What They Actually Do)

This is where standards like AS9100 and AS9120 come in.

There’s a common perception that these standards exist to add bureaucracy.

In reality, they exist to create confidence. They take what a business already does and shape it into something that is:

• Visible

• Repeatable

• Measurable

• Auditable

  
  

They don’t change what you do, they change how clearly it can be understood - and trusted - by others.

That’s what allows a business to move within the supply chain.

A Simple Example: Goods In

Take a basic process like receiving parts.

Most companies already:

• Check deliveries

• Inspect for damage

• Confirm quantities

• Raise issues when something isn’t right

  
  

In Aerospace, that same process becomes more defined:

• Are parts clearly identified and segregated?

• Is there traceability back to the source?

• Are nonconforming items controlled and recorded?

• Is there evidence of who checked what, and when?

  
  

It’s not a different process, it’s the same process - carried out in a way that stands up to scrutiny by external auditors, yes, but also by the Primes and Tiers above you that you worked so hard to contract with.

Moving Through the Supply Chain

Progression in Aerospace doesn’t happen because a business suddenly becomes more capable, it happens because it becomes more trusted.

From Tier 3 to Tier 2, from Tier 2 to Tier 1.

That movement is driven by one thing:

Confidence.

Confidence that:

• Processes are controlled

• Outputs are consistent

• Risks are understood and managed

  
  

And that confidence is built over time.

Why This Matters for Your Business

If you’re looking at Aerospace as a market - or already operating within it - understanding this structure properly changes how you approach it.

It stops being about:

• “Getting certified”

• “Ticking boxes”

• “Meeting requirements”

  
  

And becomes about:

Building a business that can be relied upon within a high risk, high trust environment.

That’s a different mindset, and it’s the one that separates businesses that stay on the edge of Aerospace…from those that become part of it.

Final Thought

OEMs, Primes, and Tier 1 suppliers aren’t just labels.

They represent levels of trust within a system where failure isn’t an option.

Most businesses don’t struggle to enter Aerospace because they lack capability, they struggle because they haven’t yet translated what they do into a system that others can clearly see, understand, and rely on.

Once that shift happens, the path becomes far clearer - and that's exactly the reason Vaelo Aerospace exists - to help businesses like yours become trusted within the supply chain.