Having embarked on a plan to improve quality and relationships with its suppliers, General Motors is also reassessing the way it sources parts from, possibly looking to decrease the amount of suppliers with whom it does business while bringing work in-house.
“Engineering and purchasing are going through every commodity and assessing sourcing with an eye to bringing it inside,” GM vice president of global purchasing Grace Lieblein recently told reporters at an industry function. “We’re looking at where it makes sense.”
Ms. Lieblein brings a unique perspective to the purchasing role, having risen through the product development ranks rather than the purchasing side of the business to come to her current position. In that regard, an engineering viewpoint might allow for a more effective integration of parts sourcing operations by being familiar with the details of the automotive design and engineering processes — whether said sourcing occurs by purchasing or by developing the parts internally.
On the purchasing side, Ms. Lieblein and her team are working to bring suppliers into the process before parts are even designed. Previously, GM furnished suppliers with a statement of requirements that needed to be met. Today, the automaker is “engaging suppliers before we start designing parts.” Similar to a mutually-beneficial partnership, it’s this close collaboration between GM and suppliers that’s highly influenced by a healthy relationship — one that GM is doing its best to enhance by deploying 200 engineers on a global level to work with suppliers in the field.
Some industry analysts, however, believe that The General would be better off if it made the majority of the parts it uses in its vehicles itself — much like key competitors, namely Volkswagen, already do today. Such a model, for which GM arguably has sufficient business scale, could result in greater control and thus quality during the development, manufacturing, and subsequent troubleshooting and support stages, while being more profitable for the automaker in the long term.
The implementation of such a strategy, however, would require GM to significantly increase its internal parts design and engineering efforts, a move for which good timing seems to be of the essence.