Supplier Business

The last few months have underlined the importance of the OEM customer base of each supplier for medium- and long-term strategic success. This report, as a part of the Supplying OEMs series, provides guidance and insight into the OEM s strategic position on the purchasing side.

• OEM s current standing
• Production strategy (Locations, Platforms,etc) 
• Procurement spending and organisation
• Levels of vertical integration
• Biases in supplier selection
• Business practices regarding pricing and quality
• R&D Spending and focusings
• Modules and systems outsourcing policy
• Forward Model Programs
• SWOT Analysis of Supplying the OEM

After having provided an overview on the current standing of the OEM with regards to various aspects including sales, financial performance, product line-up and the macroeconomic environment, the report analyses the production strategy of the car maker going through the operations, revealing where volumes are expected to occur at a geographical and program level and deciphering the car maker s platform strategy. The core topic is the analysis of the car maker s purchasing strategy with a focus on the most critical areas of the interface with its supply base involving supplier selection, price policy, quality approach, R&D and modules and systems.

Based on original research and SupplierBusiness well–established surveys of working experiences with OEMs over the last few years, the report also provides the opportunity to grasp how current suppliers rate OEMs about a complete range of aspects that really matter to the supply base.

The report includes the SWOT analysis of supplying the OEM along with IHS Global Insight s much respected Forward Model Programs and a list of the major suppliers by component sector.

Thanks to its added value and unique insight, the report is a must for those suppliers looking to re–optimise their customer portfolio in light of the major changes currently underway in the global automotive sector.

One year after the emergence from the automotive industry’s largest bankruptcy, GM’s focus is now being directed towards capitalising an industry that is on the road to recovery. The carmaker, which plans to go public over the next few months, can boast of radical improvements in coping with many of the most challenging issues it has faced over the last few years; capacity reduction, labour costs, incentive-fuelled sales, a galaxy of under-resourced brands, and unconvincing products are being addressed in both the US and Europe – the markets where GM has a more established presence. All BRIC countries see GM well-positioned to grasp its share of growth, although to a varying extent.

The organisation of procurement operations has not been spared by the overall re-organisation. Bob Socia, who was appointed to the top purchasing post in June 2009, has given indications of his desire to make substantial changes both at an organisational and at a business process level. GM is striving to improve in one of the areas where it has been historically been faring worse than competitors, which is supplier relationship management. For example the policies for the management of cost-saving ideas, warranty liability as well as some of the commercial terms have been changed on the basis of the input received by suppliers.

Suppliers seem to welcome the changes, which would result in a fairer treatment towards them, as measured by SupplierBusiness’ SuRe index (Supplier Relationship), which sees the Detroit automaker record the highest increment between 2009 and 2010 in the index which ranks automakers on the basis of their business practices towards suppliers. Nonetheless, despite the upward trend, GM still ranks in the very bottom of the charts and needs to do more to improve its standing with its suppliers. Nonetheless, the more manageable size of the automaker – which has shed those brands and operations deemed non-core for the new GM – together with the full implementation of global architectures, are contributing towards the definition of economies of scale, which result in an increased attractiveness for GM programs in the supply industry.

Leveraging on our authentic research and interviews with senior executives at the OEM and at suppliers, the “Supplying GM” report analyses the procurement strategy, the business policies of the new GM in light of the numerous changes which have occurred over the last year. It encompasses all the aspects which potential and incumbent suppliers should take into consideration when dealing or trying to enter in business with the new GM.

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