As the pace at which General Motors and the rest of the automotive industry brings new models to market accelerates, the pressure to keep production and subsequent launch of the vehicles as smooth as possible is vying to change the relationships between automakers and suppliers. The challenge seems to surround keeping production on schedule while avoiding major quality and other bottleneck-related glitches.
To help ensure smooth launches of new vehicles, GM hired an army of about 200 quality engineers to work with suppliers in the field. GM vice president of global purchasing Grace Lieblein told reporters at the Center for Automotive Research annual U-M Management Brief Seminars that the automaker embarked on the effort last summer.
Part of a larger undertaking by GM to build their relationships with suppliers, the roughly 200 quality engineers — of which a third are contractors — are assigned to supplier production facilities to identify where they need help and to pinpoint possible problems before they turn into bottlenecks. The larger-scale effort to improve supplier relations includes training sessions globally. GM’s ties with suppliers have had their ups and downs over the last two decades.
“If you don’t have a great relationship with a supplier, it is hard to get that extra capacity or suggestions to improve your product,” Lieblein said. “That is all discretionary. They don’t have to show us and give us technology they are working on.
“You can’t transform a relationship overnight, but we have made a big improvement.”
Much like GM and several other automakers, many suppliers were on the brink of filing for bankruptcy or going out of business entirely during the economic recession of 2008 and 2009. Today, they’re running leaner businesses with fewer production facilities and employing fewer workers — a circumstance that also mirrors their OEM customers. The gradual growth in industry sales during 2011 and 2012 allowed the suppliers to scale their operations gradually, but with automotive sales expected to reach 15.5 million new cars and trucks in the U.S. in 2013, some suppliers are scrambling to keep up with demand.
Most recently, General Motors made waves among the industry by instituting a new purchasing policy that placed recall responsibility on suppliers while granting the automaker access to a supplier’s financial information. Ms. Lieblein, who rose through the product development ranks rather than the purchasing side of the business to come to her current position, defended GM’s new contracts, saying that suppliers are not necessarily any more responsible for the cost of the recalls and that the new terms shouldn’t “pose an unreasonable risk” (to suppliers) while defending GM’s desire for more access to suppliers’ financial information — part of a bigger plan to establish a more open and transparent relationship.