Can Supplier Management Be Saved in the Automotive Sector?

Undoubtedly, the areas of supplier development and supplier relations are slipping relative to the popularity of other forms of direct vendor engagement.

The fundamental question we’ve asked ourselves is this: Can Supplier Management Be Saved? We try to answer it in this MetalMiner/Spend Matters research download – free, with registration. Featuring MetalMiner and Spend Matters PRO analysis of the supplier management market, the PDF includes three individual research briefs:

  • Honda Ltd. Slipping in Supplier Relations, According to New Report (Lisa Reisman, Executive Editor, MetalMiner)
  • Toyota Motor Corp, BMW Blaze Trail in Automotive OEM-Supplier Relations (Lisa Reisman, Executive Editor, MetalMiner)
  • Can Supplier Management Be Saved? The Problems with SIM, SRM, and Risk Management (Jason Busch, Executive Editor, Spend Matters; Thomas Kase, Principal Analyst, Spend Matters)

By first exploring the challenge of supplier management in the automotive sector (there will be some success stories as well) and then delving into fundamental issues with the typical technology underpinnings supporting such programs, we hope to bring the topic to surface by bridging the manufacturing and systems world.

But perhaps it’s worth stepping back and first examining the origins of the term and supplier management art.

When one hears the term “supplier collaboration,” a few companies come to mind. For example, Honda and Johnson Controls are two firms in the automotive industry that have set the standard for supplier collaboration. Many studies, books, and white papers have touted the benefits of strong supplier relations, which often include greater profitability for both partners, innovative product development ideas, cost reduction opportunities, and more.

The value derived from strong supplier relations reminds us of a case study from the classic negotiation book, Getting to Yes by Roger Fisher, William Ury, and Bruce Patton. I recall that a case study involved dividing into teams with the objective of getting as much of an orange as possible (yes – we refer to the fruit!). Though the book covers the topic of negotiation, it serves as the foundation for positive supplier relations.

When different teams sit opposite one another to negotiate the terms of how the orange will be divided, most teams conclude the only option involves cutting the orange in two. But as Fisher and Ury describe, through a series of open and honest communications, both parties end up learning that they each actually want a different part of the orange – one the peel and the other the pulp.

And so the process of creating strong supplier relations (supplier management, supplier relationship management, or whatever term you prefer) rests on the ability of both parties to find ways to better understand how the other party sees the orange (so to speak).

Curious to learn more? Download this paper FREE: Can Supplier Management Be Saved? Analysis and Technology Overview

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