BMW tops ranking in supplier relationship index

27 June 2012

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27 June 2012 | Kamalpreet Badasha

BMW has been rated number one in the 2012 Supplier Relationship (SuRe) index scoring 617 points out of a possible 1,000.

The annual research, conducted by information company IHS, ranks 28 carmakers based on interviews with executives at 230 automotive suppliers.

In second place was Porsche with 611 points, followed by Mercedes-Benz with 606 and Jaguar Land Rover with 599.

IHS analyst Matteo Fini, said: “The key reason for the improvement by BMW, according to suppliers, was providing them with the potential to make a profit over the lifetime of a contract.”

The bottom three companies were Chinese manufacturers Dongfeng Motor Group with 402 points, FAW Group Corp with 391 and Chery Automotive with 370 points.

The index is compiled using qualitative ratings for 29 metrics provided by suppliers, which are then converted into points. The metrics include payment terms, support in achieving price reduction, protection of supplier’s intellectual property and demands for better logistics. The car manufacturers are then given individual scores for five concepts: profit potential, organisation, trust, pursuit of excellence and outlook.

BMW ranked first for outlook, which assesses how suppliers feel about the future success of the car manufacturers as a customer for securing business. BMW was second for organisation, which examines the quality of communications with the supplier. It was also second for pursuit of excellence, a concept that looks at the extent to which the car manufacturer achieves competitive advantage by getting the best-in-class technology delivered to the customer. BMW came third for profit potential, which is defined by factors such as productivity gains and payment for parts.

SM reported in May that the latest North American OEM Supplier Working Relations Study, published by consultancy Planning Perspectives, found that despite Chrysler and General Motors having improved relations with suppliers for the fifth consecutive year, they still lagged behind Toyota, Honda, Ford and Nissan.

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