WINDSOR, ON, Canada – Chrysler next week will offer a first glimpse of revised supplier-performance guidelines developed to ensure the auto maker can deliver on an expected global sales surge in 2012.
“With the huge uptick in projected volume that we’re anticipating, there’s a very strong need for the suppliers to be able to keep up from a capacity standpoint, (and) also from a quality and innovation standpoint,” says Sig Huber, senior director-supplier relations.
Chrysler expects 2.4 million new-vehicle deliveries worldwide next year. This year’s target is 2.2 million, but through the first four months of 2011, the auto maker’s sales rate is lagging slightly, according to Ward’s data.
This latest version of Chrysler’s “external balanced scorecard,” which appears next week on its supplier website, is the third since 2009 and underscores a renewed interest in smoothing supplier relations.
CEO Sergio Marchionne said recently Chrysler has an unspoken “social contract” to ensure the profitability of its suppliers, while Huber last year reinstituted twice-a-year outreach programs.
This latest round of “strategic changes” is designed to make EBSC participation more intuitive for suppliers. “And more accurate,” Huber tells Ward’s here at the Automotive Parts Manufacturers Assn.’s annual conference.
“The goal was to align the metrics that we use to judge supplier performance with our long-term objectives as a company moving forward,” Huber says.
Supplier performance now will be based on delivery, quality, cost, warranty and partnership.
“Warranty was (previously) buried in the quality metric,” Huber says. “We’ve taken that out and made it its own category because driving (down) warranty is very important to the long-term quality of our vehicles. It’s a very important focus.”
The revision follows consultation with individual Chrysler suppliers and the auto maker’s supplier advisory council.
“We have changes in other metrics that will be available and visible to (suppliers) in July,” Huber adds.
To acquaint suppliers with the new EBSC, Chrysler conducted detailed training sessions last month. Because the stakes of failure are high.
“If you’re struggling with (the EBSC), it will impact your ability to be in the long-term sourcing plan,” Huber warns.
The new EBSC is introduced as Chrysler records gains in a major third-party supplier-satisfaction survey. After suppliers reported being “ambivalent” toward Chrysler for some three years in Planning Perspectives’ working-relations index, the auto maker inched up to the “somewhat preferred category” in 2011.
While acknowledging the operational performance of suppliers always has been fundamental to an auto maker’s success, “it will be more so” this year for Chrysler, Huber says.
In coming months, the auto maker will equip its LX-platform cars with an 8-speed automatic transmission while preparing for the launch of a new high-volume Dodge-brand C-segment sedan.
Based on the same platform that shoulders the popular European-market Alfa Romeo Giulietta, the new car has been described by Marchionne as “critical” to Chrysler’s long-term success.
