General Motors Sees Improvement with Supplier Relations
by: iverpenn
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Word Count: 597
We all know that both
But don’t look now, according to results of the 7th Annual
North American OEM-Tier 1 Supplier Working Relations Study, efforts by General
Motors to improve relations with its suppliers have had a significant, positive
impact in how its suppliers view working with the company.
"The improvement is very good news for GM," says
John W. Henke, Jr., Ph.D., president and CEO, of Planning Perspectives, Inc.,
which conducts the annual study. "In late 2005, Bo Andersson (GM's Group
Vice President, Global Purchasing and Supply Chain) announced a GM program to
improve relations with its suppliers. It is now apparent that the program is
working. In fact, in the 15 years we've been doing studies of this type in the
automotive and other industries worldwide, we have never seen such a dramatic
improvement.
Unfortunately for Ford, however, it has slipped into last
place - the position held by GM for the past 15 years. The troubled
"Ford announced a similar program about the same time
as GM, but our study shows the Ford program has been a disappointing failure.
This is unfortunate because Ford more than ever is dependent on the support of
its suppliers to help in its turn around, as was Chrysler in early 1990s. A key
to Chrysler's success then was building strong relations with suppliers on its
way to a decade of strong profits," Henke said.
Both General Motors (also maker of GMC hubcaps) and Ford are far behind
The WRI rates these six major North American OEMs in 17
key areas that impact their supplier working relations. These include such
things as degree of trust, open and honest communication, amount of help given
to suppliers to reduce costs and the supplier's profit opportunity at the OEM.
This year Ford ranks at the bottom of the six North
American OEMs with a ranking of 162, a 12 point drop from last year. GM moved
up to 174 from 131, and Chrysler fell to 199 from 218 after a steady four-year
gain. Chrysler's drop is corroborated by a decrease of 50% in the number of
suppliers who consider DCX a "most preferred or very preferred" OEM
to work with. Nearly 50% of Ford's suppliers would rather not work with Ford.
About The Study
Now in its 7th year, the annual study determines the supplier working
conditions in numerous areas at the North American domestic OEMs (GM, Ford and
DaimlerChrysler) and the foreign domestic OEMs (Toyota, Honda and Nissan).
About the Author
Iver Penn is a Mass Communications graduate who hails from Wyoming. She is at present an associate editor of a publishing company in Colorado.
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