Detroit, Michigan — Plante Moran published the results of its twenty-second annual North American Automotive OEM-Supplier Working Relations Index (WRI) Study on Monday, showing that some automakers are trending positively, some are hitting a plateau—and one in particular is on a sharp decline.
The annual study from Plante Moran tracks supplier perceptions of working relations with their automaker customers in which they rate them across eight major purchasing areas broken down into 20 commodity areas.
The results of the study are used to calculate the WRI which can then be used to calculate the economic value of working relations based on a proprietary economic model.
Accounting for data collected from Japanese and North American automakers between 2013 and 2022, the study’s results saw Toyota occupy the top spot, with an index score of 345, down only two points from last year.
Honda, from its second-highest scoring position, made the most substantial gains this year, rising 18 points to give the OEM a score of 334; just 11 points shy of Toyota’s top position.
General Motors and Ford suffered losses of two and seven points year-over-year, bringing their respective scores to 287 and 242.
Nissan’s score rose by eight points, bringing them more closely into the top-four race.
Stellantis, by far, suffered the worst losses in supplier relations, however, reporting a drop of 42 points from last year, bringing the company’s total score to 128 and marking 122 total points lost over the past nine years.
“The industry was hit with unprecedented challenges this past year that created tensions with suppliers that will only get worse if they’re not resolved,” said Dave Andrea, principal in Plante Moran’s strategy and automotive and mobility consulting practice.
“Combine the supply chain disruptions with the accelerating shift to EVs that will negatively impact many suppliers, and OEM supplier relations could become unnecessarily strained unless this transition is handled in an open and honest manner.”
Andrea said that when it comes to building trust with suppliers, “Companies get out what they put in. In the new world of scarce resources with numerous customer opportunities, the supplier has to ask himself: who would I rather do business with, my customer of choice? And the answer comes down to three questions: Who do I trust? Where will I get the best return on investment? And, what is the prospect for future business? And the OEMs are equally dependent on suppliers they can trust.
“The OEMs really need to focus on more transparency and better communication. They need to better align purchasing, engineering, and manufacturing to achieve the same goals—improved communication, efficiency and speed—in order to take cost and time out of the entire supply chain while helping suppliers achieve their cost and financial performance goals as well. These processes must become more agile and streamlined to benefit both the OEM and supplier. If done properly, it’s win-win, and setting realistic goals, fulfilling commitments, and sharing information openly and honestly doesn’t cost any money.”
