Car manufacturers' SRM progress stalls

13 May 2013

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13 May 2013 | Adam Leach

The six big US-based automotive manufacturers failed to make any significant progress in how they are viewed by vendors in the past year in a sign they have already “picked all the low hanging fruit” of supplier relationship management.

The 2013 OEM-Supplier Study, published today by consultancy Planning Perspectives found no meaningful change in the perception held by the automotive supply chain of the world’s six largest car manufacturers.

Toyota once again scored the highest in the Supplier Working Relations Index - which was based on 583 responses from vendors - but its score of 297 out of 500 was an improvement of just one point compared with 2012.

In an unchanged order from 2012, Honda was second, followed by Ford‎, Nissan, General Motors and Chrysler.

In an interview with SM, study author John Henke, president and CEO of Planning Perspectives, suggested the lack of change was a sign the firms would need to develop their strategies to get further improvements.

“They’ve definitely picked all the low-hanging fruit, all the obvious things that they should be doing as good businesses. But now they’ve got to start thinking about the real things - the right communication, providing suppliers help and direction as to how to do better and getting the engineers more involved,” he said.

The study proposed either the firms did not have a comprehensive plan on how to improve supplier relations, or that if they did it was not being passed down far enough through the organisation.

Over its many editions, the report has found manufacturers that generate positive relations with suppliers benefit from a supply chain that is more willing to invest in new technologies, go beyond contractual terms and give greater price concessions. In contrast those with poor relations receive smaller benefits and are forced to deal with less experienced representatives from the supplier.

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