New Annual Index to Track Automotive OEM-Supplier Working Relations

Posted: May 13, 2003, 9:00 a.m., EST

BIRMINGHAM, MI -- Planning Perspectives, a company specializing in developing and implementing in-depth surveys of suppliers for the automotive OEMs and Tier 1 suppliers, has unveiled a new annual index to help the auto industry gauge how well the major U.S. and Japanese automakers are working with their suppliers.

Called the OEM-Supplier Working Relations Index (WRI), it ranks on a scale from very poor to very good how suppliers rate their working relationship with their automaker customers based on five areas: the quality of their overall relationship, ranging from partnership to adversarial; the extent to which OEM communication is open and honest; the amount of OEM help provided to suppliers in meeting OEM price and quality demands; the degree of OEM hindrance that impedes the suppliers' ability to do the best possible job in providing products to the OEMs; the supplier profit opportunity at each OEM. These five areas, in turn, are determined by evaluating 17 variables.

The WRI was two years in the making, the company said. To arrive at the Index rankings, Planning Perspectives analyzed a total of 2480 OEM-supplier business situations reported by suppliers in its 2002 and 2003 North American Automotive Tier 1 Supplier Studies. The annual studies each involved over 260 suppliers sharing with Planning Perspectives in an anonymous survey their experiences of working with Ford, General Motors and the Chrysler Group, plus Toyota, Nissan and Honda. These suppliers, of which over 60 are Top 100 Tier 1 suppliers, make up more than half of these automakers' annual buy.