Toyota, Honda, General Motors finish 1-2-3 in annual Working Relations Study
DETROIT, May 24, 2021 /PRNewswire/ -- Results of the 21st annual North American Automotive OEM - Supplier Working Relations Index® (WRI®) Study released today by Plante Moran show that in spite of the serious challenges facing automakers and their suppliers this past year, four of the six major U.S. and Japanese automakers improved their scores. Two automakers worsened.
The top three scorers again this year on the WRI® graph were Toyota at 347 and Honda at 316 who gained only two and six points respectively, and General Motors in third place. GM jumped 20 points to 289, further distancing itself from Ford in fourth place which dropped 15 points to 249. Nissan scored only 211 but gained 21 points – enough to retake fifth place from FCA/Stellantis which lost 28 points and is in a distant last place in the rankings at 170.
"Without a doubt, the industry went through a trial by fire this past year, but seeing the positive results for four of the six automakers was a surprise in many ways," said Dave Andrea, Principal in Plante Moran's Strategy and Automotive & Mobility Consulting Practice, which conducted the study. "Typically, a crisis is not the time to improve established relations, but the OEMs' efforts to enhance mutual trust, transparency, and communications moved relationships forward through the worst of COVID-19 and the stop and restart of their operations.
"The automakers will have to continue building on these fundamentals to survive near-term parts shortages like the scarcity of microchips, and truly deepen relations to support the development of electric vehicles and related technologies in-house or out-sourced, or through acquisitions or partnerships. These industry challenges put more pressure on purchasing organizations to respond and resolve issues more effectively."
The WRI® survey identifies specific supplier feedback on many attributes contributing to a purchasing organization's throughput effectiveness. Looking across these attributes Honda is rated the best in purchasing effectiveness overall, Toyota in second and the others following in the same order as the 2021 WRI® rankings.
Further, the table shows you don't have to be the biggest to have the best throughput as Honda shows with its top ranking in five of the seven variables measured. On the other hand, it suggests GM used its size and resources to improve its perception with suppliers, ranking first on buyer accessibility and, as the full Study shows, improving on all these variables except Effective Product Development Involvement, which slipped.
"We're often asked by automakers what's the key factor – the "silver bullet" – that will improve their Index ranking," said Andrea. "The answer is: there isn't one simple thing. It's making many small, incremental improvements to the foundational elements over time – such as paying invoices, and training knowlegeable buyers – and aligning top leadership and all functions to support value-add by the supply chain."
A nine-year comparison of the OEMs' performance supports this premise. Although Toyota only gained two points this year, its corporate mantra of "continuous improvement" has paid off with a 51-point gain since its low point in 2012, while GM improved by 38 points, and Honda, 23 points. But, over the same nine-year period, Ford dropped 18 points, Nissan was down 45 points, and FCA/Stellantis fell 78 points.
WRI CORNERSTONE: OEM-SUPPLIER TRUST AND COMMUNICATION
The Study has shown the cornerstone of good working relations to be trust and communication, particularly important factors in the current uncertain business environment with billions of dollars and thousands of jobs at stake. Figure 2 shows how suppliers have ranked the six automakers in terms of trust over the past three years. The three-year average of Supplier Trust of OEM shows Toyota first with significant improvement; Honda and GM relatively steady at second and third; Ford down slightly at fourth; Nissan gaining and in fifth place and FCA/Stellantis dropping significantly this year to last place.
Click to Read More.
SOURCE Plante Moran