By: David Sedgwick
November 12, 2013
DETROIT — BMW has cemented its status among North American suppliers as the top-ranked automaker purchasing operation, but Ford and Chrysler are moving up.
According to a new survey of 108 suppliers by Deloitte Touche Tohmatsu Ltd., BMW AG got the highest grades, followed by Ford Motor Co. and Honda Motor Co.
Suppliers rated "openness to new ideas" as the most important indicator, and BMW did well in that category because it invites suppliers to pitch new technology.
The German automaker is highly rated in part because suppliers are allowed to demonstrate their technology before BMW freezes a vehicle's design, said Torsten Maschke, president of Freudenberg NOK's global automotive sales.
Freudenberg is a global supplier of seals for engines and transmissions — key components for a high-performance brand such as BMW.
"At an early stage" of a vehicle's development, "it is still possible to make changes," Maschke said. "At the end, it's pretty hard."
Toyota Motor Corp. was in fourth place and Chrysler Group in fifth place in the survey, which measured supplier attitudes toward 14 automakers that produce vehicles in North America.
General Motors finished ninth this year. In the five surveys conducted since 2004, the company has never risen above ninth place.
Volkswagen AG, which ranked second in Deloitte's European survey, was 10th in North America.
Volkswagen, which opened its Chattanooga assembly plant in the spring of 2011, is "still working through some startup issues," said Craig Giffi, who conducted the Deloitte survey.
The Deloitte survey, which was commissioned by Automotive News, used five yardsticks to grade each automaker: openness to new ideas, ease of working with it, trust, financial incentives and ability to implement innovations.
BMW scored high for the ease with which it works with suppliers — not a surprise, since its purchasing unit is run by an engineer, Klaus Draeger.
BMW has yet another advantage. As a maker of luxury cars, BMW can focus on technology rather than price because it can raise prices more easily, said Neil De Koker, president emeritus of the Original Equipment Suppliers Association.
"Innovation is a key part of their mantra," De Koker said. "Because they are a premium manufacturer, [higher prices] for the innovations are not as serious an issue as it would be for a Ford Focus or Chevy Malibu."
While BMW has been a perennial technology leader, mass-market automakers are catching on.
Ford, which placed second in the survey, announced in August that it would invite suppliers to join the initial benchmarking phase of product development.
That allows suppliers to participate in the design of a vehicle nearly a year earlier than previously allowed, said Birgit Behrendt, Ford's vice president of global programs.
"Suppliers should be part of the benchmarking process at the earliest possible stage," Behrendt said in a phone interview with Automotive News.
"We are currently phasing this in, as we speak. It's a terrific way to let them be an integral part of the team at the early stages."
Ford also has begun introducing new technology — such as blind-spot detection and parking assist — quickly across its entire model lineup, rather than limiting such features to a couple of premium models. That allows suppliers to earn a bigger return on r&d investment, said Hau Thai-Tang, Ford's global purchasing chief.
"We don't deploy [new technology] just on one vehicle," Thai-Tang said during an Oct. 21 roundtable discussion with journalists. "We put it on across our portfolio. That gives us economies of scale, and it allows suppliers to recoup their investment."
Several years ago, Ford began dispatching executive teams to visit eight or 10 key suppliers a year. At daylong events, the suppliers pitch new technology to Ford's senior executives, who are empowered to offer immediate answers.
Ford's self-opening liftgate — triggered by a wave of the motorist's foot underneath the bumper — arose from a team visit to German supplier Brose Group.
While BMW has been a perennial top performer in the Deloitte survey, other automakers are taking steps to make their purchasing operations more responsive to suppliers. One sign: Ford, Chrysler and GM have put engineers in charge of purchasing.
OESA's De Koker said: "I think everybody is doing better to some degree."