General Motors falls into last place in automotive SRM ranking

Will Green is news editor of Supply Management
12 May 2014

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12 May 2014 | Will Green

General Motors (GM) has fallen into last place in a ranking of supplier relationship management among US and Japanese automakers.

The 2014 OEM-Supplier Relations Study, produced by Planning Perspectives, shows GM has displaced Chrysler in the bottom spot among the six main car manufacturers serving the US.

According to the study’s Working Relations Index (WRI), Toyota remains in first place with 318 points, up 21 points on 2013, followed by Honda (295), Nissan (273), Ford (267), Chrysler (245) and GM (244).

The annual chart shows Ford has slipped back into fourth place, having been in third place ahead of Nissan since 2010. Overall, Japanese manufacturers have increased their scores since 2013, while US automakers have seen them drop off.

The study was based on responses from 411 sales people from 362 tier one suppliers, who were asked about their experience of dealing with buyers, covering areas such as trust, communication, levels of help, and concern for supplier profits.

John Henke, president and CEO of Planning Perspectives, told SM: “The Japanese [manufacturers] are much more effective on carrying out the activities associated with supplier relations. With the domestics [US manufacturers], there seems to be no real pattern of trying to improve.”

Henke said firms with good supplier relations had access to a supplier’s newest technology and their best pricing.

“The individual buyer who deals with sales people on a day to day basis has a tremendous impact,” he said.

"The better the relations the greater the probability the supplier will give higher price concessions. That makes sense because if you [a supplier] have better relations you're more secure about your future by virtue of the way your customer is treating you."

If the German manufacturers, who are reported separately, were included in the WRI BMW (311) would be in second place overall, while Mercedes would be below GM (227) and Volkswagen (181) would be in last place.

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