GM Back In Suppliers’ Good Graces After Survey Reveals Positive Gains1
General Motors made some big promises regarding its supplier relations years ago, and it looks like new policy implementations are paying off.
Automotive News reports GM now ranks third out of North America’s six largest automakers—including Ford, Fiat-Chrysler, Nissan, Toyota and Honda. The data comes from a recently released Henke survey. The survey evaluates purchasing policies and draws its conclusions from questionnaires filled out by 652 salespeople among 108 tier one suppliers.
GM now sits behind Toyota (first) and Honda (second) at number three. Two years ago, GM tied FCA for last place, which makes the momentum extraordinarily significant. Ford remained in fourth place, while FCA climbed to fifth place. Nissan saw its policies and operations drop the automaker to last place.
Since 2011, GM implemented a host of new procedures to help improve relations with suppliers. It now awards suppliers long-term contracts, introduced a no-bid contract dubbed the “One Cost Model,” improved sales forecasts for better production volumes and began involving suppliers in the vehicle’s design process.
GM was also named the best North American automaker to work with regarding exterior component purchasing segment. Nissan ranked worst in five of the six categories, while FCA was named worst in the body-in-white segment.
“General Motors is still asking for cost-downs, but in a nonadversarial way,” said John Henke, author of the survey and president of Planning Perspectives Inc. “They aren’t just demanding lower prices; they are helping suppliers to figure out how to take cost out.”
GM asked for feedback from roughly 500 suppliers in 2015. The responses it received helped shuffle personnel to put the right people in place during job reviews.
“We made some personnel moves based on that feedback,” GM purchasing chief, Steve Kiefer, said.
“Some of our people have adapted really well [to GM’s new purchasing policies], and some have been moved to other areas.”
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Anywhere I have worked, being in the suppliers’ good graces meant “pays bills on time” more than anything else……..