Sourcing strategy helps suppliers/OEMs - The Inside Line - General Motors management strategy details - Brief Article

Automotive Industries, May, 2002

General Motors is testing the sourcing waters with a new interior integration strategy. The advantage of this strategy (to GM) is to gain efficiencies and lower cost by outsourcing project management and eventually design, engineering, and sourcing control to the supply base. The advantage to the supply base is that the latter will eventually happen (some doubt that it will). The real carrot for the suppliers is sourcing control -- i.e. they want to source themselves. But how much can a specific supplier expect to gain? That is, how much do they not have now? If you look at just the major interior components (defined here as carpeting, door trim panels, floor console, headliner, instrument panel, package tray, and seat assembly), GM suppliers have the most to gain (of the Big Three). For those components, GM currently uses 4.88 suppliers per platform. That is one more than both DaimlerChrysler (3.72 supplier) and Ford (3.82).

But while GM presents an opportunity for supplier consolidation at the platform level, it is nothing compared to the Japanese OEMs: Honda utilizes an average of 7.0 suppliers per platform for those same seven components, while Toyota uses 5.3. Can the Japanese be the next target for supplier consolidation at the platform level?

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