Longer contracts for smart suppliers

7 September 2005
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08 September 2005 | Rebecca Ellinor

Carmaker DaimlerChrysler is to strengthen relationships with long-term suppliers in a bid to guarantee the quality of their future performance.

In a speech to automotive industry colleagues in the US, Peter Rosenfeld, Chrysler Group executive vice-president for procurement and supply, announced new contracts with two interior suppliers for 2008.

Johnson Controls International will supply seats and Magna International the remainder of the vehicle cockpit, as "highly integrated partnership organisations" (HI-POs).

Rosenfeld said the firm was developing a deeper relationship with suppliers. "The goal is to pursue a select group of sources that can achieve strenuous performance goals based on transparent and objective measures."

He added that as well as suppliers identified as HI-POs, the company has also introduced a "reward zone" for elite suppliers.

He said in general, reward zone suppliers will keep their business with the firm as long as they maintain a high performance level.

A spokesman for the Society of Motor Manufacturers and Traders - which works to improve relationships between suppliers and manufacturers - said: "Any programme that seeks to communicate expectations clearly and outline the outcomes of success and failure is to be welcomed."


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