23 May 2011 | Angeline
Japanese car maker Toyota
has the best relationships with its suppliers according to an annual
study of six major automotive manufacturers.
The latest results, based
on responses from tier-one vendors, placed Honda second, Ford third, Nissan fourth, General Motors fifth and Chrysler sixth.
Toyota regained the title from Japanese rival Honda which had held the top spot for the past two years,
according to the Annual North American OEM - Tier 1 supplier working
relations study published
by SRM consultancy Planning Perspectives.
Although overall the
results indicate US car makers are not doing as well as their Japanese counterparts,
Ford, GM and Chrysler have made positive progress in most areas, whereas the Japanese
firms’ relations have seen a decline over the past 12 months.
A particular area where the
US “big three” are trailing is in the area of “Original Equipment Manufacturer
(OEM) Trust”. Toyota and Honda have a major lead in their respect for
suppliers’ intellectual property, such as patents and confidentiality of
The US companies also rank
poorly in vendors’ willingness to share new technology without assurance of a
purchase order. Suppliers are more willing to share new technology with Honda
and Toyota than with GM and Chrysler. Tier-one vendors are also more willing to
invest in new technology for Honda, Toyota, and Ford than they are for Nissan,
GM, and Chrysler.
“With the continuing need
for innovation and technological leadership on both the product side and
manufacturing side, the financial and competitive value of ‘trust’ cannot be
discounted,” said John Henke, study author and president of Planning
“The US automakers need to
move toward mutually beneficial contracts that protect suppliers’ intellectual
property a lot better than they’re doing. If the Japanese automakers can do it,
surely the US automakers can do it.”
As well as innovation,
Henke added, car makers with the best rankings also receive the greatest
benefit from suppliers in terms of lower costs and higher quality.
“There is no silver bullet
that will bring about more collaborative, more trusting supplier relations.
Such relations result from complex interactions of OEM-supplier activities.
While the actions of both parties reinforce the trust each party has of the
other, it is the actions of the OEM that are the primary determinants of the
supplier working relations,” he said.
The study analysed
responses from 540 sales people at 415 tier-one suppliers, representing 63 per
cent of the car makers’ annual spend.