Nissan loses, GM gains supplier favor

NissanNissan has recently been rated virtually dead last in terms of their relationship towards their suppliers. Tied with Fiat Chrysler; these rankings according to newly released annual surveys of auto suppliers. This drop in ranking was correlated with a change in senior management in the purchasing division of these companies. When I read this, I thought of Hau Thai-Tang and how his relationship with suppliers must be an extremely important part of his job. Although we didn’t specifically ask him about this part of his job we assumed that he, along with the purchasing division at Ford, has a good relationship with suppliers because of the shining reviews that Federal Mogul gave us about Ford. Although changes in purchasing management led to dissatisfaction from suppliers in two cases, in General Motors case, a change in management pulled them up from usually being at the bottom of these surveys. Toyota remained in the top spot while Honda was second.

These surveys are obviously very important to suppliers and OEMs because both Nissan and GM have responded to these results. GM, according to Henke the author of the surveys,”has been working their butts off, trying to improve,” This shows that although the OEMs have most of the power in the manufacturing process, the suppliers have a lot of influence in the process that cannot be ignored. This reminds me of our meeting at Federal Mogul in which they told us about how their relationship with manufacturers is very give and take. Such as how they can bring new ideas to companies as well as try to make parts that fit the ideas of the companies. The relationship between suppliers and manufacturers is vital for the auto industry, and every company that hopes to thrive in the industry takes note.

5 comments to Nissan loses, GM gains supplier favor

  • Barrett Snyder

    I would like to believe that almost all manufacturers strive to have the best relationship possible with their parts suppliers. As the dynamic of development and production between the parts suppliers and manufacturers becomes increasingly complex, having parts on time and correctly manufactured is pivotal to keeping the assembly lines running and profits coming in. Every minute a line is down or vehicles are recalled due to faulty parts, people lose money. This has become especially relevant in light of Takata’s massive recall on airbags. Manufacturers’ vehicles are now being deemed unsafe and costly replacements are taking place. As we learned while at Federal-Mogul’s Plymouth Technical Facility, a close relationship between manufacturers and suppliers helps keep companies on the cutting edge of development and technology and allows for profits on both sides. As the Director at Federal-Mogul suggested, companies like Ford and BMW who work closely with him see great technology and help Federal-Mogul to keep winning deals and recognition for their revolutionary products from the profits they generate.

  • frankn18

    This brings in an aspect of the industry that is often over looked. I always imagined car companies as massive conglomerates that produce everything they need to produce a car. Little did I know that was far from the case. The personal relationships between company execs is incredibly important. If a supplier develops a new technology that everyone wants, yet can’t produce to meet all the demand, it comes down to personal relationships to try to get the part for your vehicles.

  • siegels18

    It’s certainly interesting that even though having a good relationship with suppliers is in the best interest of everyone involved, but still many OEM’s don’t have a good relationship with their suppliers. I believe this comes from what Hau Thai-Tang told us about how a small cut in supply prices can save a company millions of dollars. This shows that a company must try to keep prices as low as possible while still maintaining a good relationship with suppliers. This is a very delicate balance. Thoughts?

  • brewsterw18

    Sam, you raise an interesting point about the delicate balance between relationship and keeping supply price as low as possible. During your research on this topic, what do you believe Nissan has being doing wrong and GM the opposite? If you have any ideas or anyone else, I’d love to possibly know as I’m having difficulty deciding what’s the difference between a successful relationship with suppliers and unsuccessful one other than lack of communication.

  • platte16

    Will, this reminds me of our discussion at Federal Mogul. Mr. Westbrooke mentioned if a supplier brought an idea was brought to a manufacturer and turned down but later purchased by another supplier, the original supplier would be less likely to come to the manufacturer with an idea again. Another way, I believe a manufacturer could hurt their relationships is by not paying fair value for the parts. If the manufacturer is negotiating price down as far as possible and the supplier is barely covering costs, the supplier would not likely want to do business in the future with the manufacturing.

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