Toyota’s turnaround with suppliers credited to 2 executives

David Sedgwick
AUTOMOTIVE NEWS

Published: May 12, 2014 12:40 pm ET
Updated: May 12, 2014 12:43 pm ET

Related to this story

Topics Automotive
Companies & Associations Toyota Motor Corp.

A troubleshooting Japanese executive and an American purchasing boss were the driving force behind a sharp improvement in Toyota’s relations with vendors in North America, concludes supplier relations guru John Henke.

A newly released survey by Henke’s consultancy, Planning Perspectives Inc., shows that after a six-year flirtation with mediocrity, Toyota’s purchasing operation has re-emerged as the North American auto industry’s gold standard.

And Henke credits Simon Nagata and Robert Young with leading the turnaround.

Nagata, Toyota’s former North American purchasing chief, returned to the United States in 2013 as head of North American manufacturing and R&D. Young was named Toyota’s North American purchasing chief in 2011.

Toyota and Honda Motor Co. were the top-ranked automakers in North America, according to 362 suppliers who rated their customers’ purchasing programs on sixteen variables.

Suppliers gave Toyota and Honda high ratings for a variety of factors, including rewards for cost cutting, compensation for canceled programs and cost-cutting flexibility.

No. 3 Nissan Motor Corp. and No. 4 Ford Motor Co. also received “adequate” ratings in the survey.

No. 5 Chrysler Group and No. 6 General Motors were rated “poor.”

The German automakers’ North American purchasing operations were evaluated separately, reflecting their lower North American production. BMW AG received a strong rating, but Mercedes-Benz and Volkswagen AG scored significantly lower than other automakers, trailing Chrysler and GM.

Toyota and Honda finished on top because they are “getting back to the basics,” said Henke, president of Planning Perspectives. “Very clearly, the Japanese have gotten their act together. They are back doing the right things that they had done before the recession.”

The Japanese automakers’ purchasing operations had been hampered by the 2008-09 recession, the 2011 earthquake in Japan and a rapid expansion of their North American purchasing staffs, Henke said.

Unlike their Japanese peers, GM and Chrysler had their scores decline slightly from the previous year. Henke faulted purchasing bureaucracies.

“Chrysler and GM need to get their buyers on board and tie their compensation to improved supplier relations,” Henke wrote. “Clearly, their buyers are the weakest link in their supplier relations.”

Despite GM’s rating, Henke says, suppliers reported that GM purchasing chief Grace Lieblein has worked hard to improve relations with suppliers following the company’s controversial revision last summer of its standard “terms and conditions” contract for vendors.

Lieblein subsequently dropped the most onerous provisions of that contract and added key vendors to GM’s supplier council. “She’s out there, pounding the pavement to get more trust with suppliers,” Henke said. “I think GM would be worse off without her.”

In a written statement, Lieblein told Automotive News that she is determined to improve GM’s supplier relations. “We’re in the midst of a cultural change that is sweeping in nature, and the message and tone needs to start at the top,” she wrote.

Chrysler attributed its poor survey results in part to a new online vendor payment system that suffered a glitch-filled rollout last year, plus rising production levels that stressed its suppliers.

Automotive News is a sister newspaper to Plastics News. For a complete version of this story, including automakers’ 2013 and 2014 supplier ratings, see www.autonews.com.


Comments

Toyota’s turnaround with suppliers credited to 2 executives

David Sedgwick
AUTOMOTIVE NEWS

Published: May 12, 2014 12:40 pm ET
Updated: May 12, 2014 12:43 pm ET

Post Your Comments


Back to story


More stories

Image

Bain buying TI Automotive

January 27, 2015 8:49 am ET

After months of speculation, Auburn Hills, Mich.-based TI Automotive Ltd. entered into an agreement Tuesday to be acquired by private equity firm...    More

Image

Auto industry on the hunt for new lightweight materials

January 26, 2015 4:03 pm ET

The auto industry is focusing on lightweighting, and this is igniting a race to find new materials that can meet ever-changing performance needs of...    More

Image

Continental builds low-emission interior trim factory in China

January 26, 2015 12:33 pm ET

Benecke-Kaliko AG is making the largest investment in its history to build an environmentally friendly auto interior trim plant in China, prompted by ...    More

Image

Gurit wins carbon fiber auto contract using new processing technology

January 23, 2015 9:22 am ET

Switzerland-based composite materials group Gurit Holding AG has been selected as the supplier for carbon fiber based automotive body panels at a...    More

Image

ACC's 'Roadmap' gaining traction

January 22, 2015 1:56 pm ET

Nearly a year into the launch of the latest effort to promote greater use of plastics in automotive applications, a trade group behind the push says t...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events