Executive Briefings

Is GM Finally Giving Suppliers a Break?

In an annual industry survey of auto company relations with suppliers, GM ranked dead last every year from 2002 to 2006 and ran neck-and-neck with Chrysler for the bottom rung the past three years. GM was a bully, relentlessly strong-arming parts-makers for lower prices -- that was the common refrain.

Bob Socia took command of this swamp last July when he was named GM vice president of global purchasing and supply chain. And unusual things started happening.

Socia did a lot of listening to suppliers. He brought GM's engineering bosses into the conversations. Soon, he started acting on what he'd heard.

Suppliers had cash-flow problems. Socia cooked up a plan to pay them weekly instead of monthly.

Suppliers griped that GM asked for ideas about how to cut costs, but then kept almost all the savings for itself. Socia changed the formula to share savings on a 50-50 basis.

And now, Socia is including GM's scores on independent supplier surveys as part of performance reviews for his purchasing staff.

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In an annual industry survey of auto company relations with suppliers, GM ranked dead last every year from 2002 to 2006 and ran neck-and-neck with Chrysler for the bottom rung the past three years. GM was a bully, relentlessly strong-arming parts-makers for lower prices -- that was the common refrain.

Bob Socia took command of this swamp last July when he was named GM vice president of global purchasing and supply chain. And unusual things started happening.

Socia did a lot of listening to suppliers. He brought GM's engineering bosses into the conversations. Soon, he started acting on what he'd heard.

Suppliers had cash-flow problems. Socia cooked up a plan to pay them weekly instead of monthly.

Suppliers griped that GM asked for ideas about how to cut costs, but then kept almost all the savings for itself. Socia changed the formula to share savings on a 50-50 basis.

And now, Socia is including GM's scores on independent supplier surveys as part of performance reviews for his purchasing staff.

Read Full Article