Working Relations Index®

The PPI proprietary Working Relations Index® (WRI®) methodology is a quantification of suppliers’ working experiences with a company to whom they are supplying products and/or services.  As such, it is also a sophisticated indication of  suppliers willingness to have and keep the company as a customer.
PPI’s WRI® model is comprised of five major components with each component containing two or more variables (Figure 1). Each variable is represented by one or more questions in the survey questionnaire. The value of each individual variable is the average response of the suppliers who answered the variable-related question.
The WRI® metrics are calculated by combining a weighted average response of each variable of a specific component to obtain the component score. Each of the five component scores are then weighted and combined to provide an overall WRI® metric for each company or unit within the company, e.g. division, geographic region, purchase area, etc.

Figure 1

The weights applied to the variables and components and the formula to calculate the WRI® metrics are the intellectual property of PPI and is not ever shared with any individuals outside of PPI.

 

The WRI® model was created by Professor John Henke in 2002, ten years after he began conducting in-depth confidential supplier surveys for various North American OEMs, which evolved into the Annual Automotive Industry™ Study. The results of these studies were captured in a comprehensive PPI supplier database. Using this data, Professor Henke, through rigorous statistical analysis and modeling, discovered and verified that the behavior variables of the WRI® model (Figure 1) were an accurate quantitative measure of a company’s working relations with its suppliers.

Based on a 500-point scale, the WRI® model enables companies to assess its supplier working relations effectiveness and compare performance across purchasing areas, divisions, sites, industry peers, and other dimensions identified by the company (Figures 2 and 3).

The WRI® methodology has been used by many high-performing companies to improve their working relations with suppliers and thus accrue the many tangible benefits associated with trusting, collaborative working relations.

Figure 2


Figure 3