GM Aims To Fix Ailed Relationships With Suppliers1
General Motors has been working hard to improve its relationship with suppliers, with Global Purchasing Chief Grace Lieblein receiving great feedback from them. However, according to an industry survey, GM still has a long way to go.
In an interview with Automotive News last week, Lieblein said she recognized that engendering good supplier relationships was a difficult message to project through General Motors’ 6,000 purchasing employees. She has tried “emphasizing greater collaboration with suppliers on technical innovation and eliminating waste” instead of relying on bean counters who are only interested in the bottom line.
Yet Planning Perspectives, a Detroit-based consultancy, concluded in a survey they conducted that the relationship General Motors has with suppliers is not getting better, ranking last among the top six automakers. “Good leadership but poor execution by buyers who interface with suppliers on a daily basis,” said the report.
Apparently, cultural issues go beyond the organizational problems that managed to lead to problems General Motors has been having with a recall involving defective ignition switches. Too often, “the gospel espoused by executives is not heeded by the rank and file,” says president of Planning Perspectives, John Henke. General Motors CEO Mary Barra “keeps talking about cultural change, but this is an example of how difficult that will be. Grace faces these impenetrable walls at several stages going down” the organizational structure.
“We’re trying to understand from the suppliers’ viewpoint what some of the big issues are, so we can go after them,” says Lieblein. “Part of it is getting the cultural change all the way through the organization.”
Lieblein’s stock with suppliers grew in February when she agreed to roll back contract terms and conditions that General Motors had implemented during the summer of 2013, as suppliers had felt they were exposed them to greater warranty liability and “put their intellectual property at risk.” Since then, GM has instituted a Strategic Supplier Engagement program to improve relations with several hundred suppliers by offering better access to GM purchasing managers and executives, and insider peeks of GM products and technologies. So far, this program has met with praise by suppliers.
“I really believe that we’ll look back three years from now and say ‘This was a turning point,'” Lieblein says.
- Sweepstakes Of The Month: Win a 2023 Corvette Z06 Convertible. Details here.
Nothing new here as this has been ongoing.
It will take time to fix these relationships. I expect some people who do not change may be shown their way out too.
Also I expect the suppliers will also be held to a standard too as many have taken advantage of GM over the years too. GM may have deserved it but most creditable companies would not do it.