Supplier Rewards

Chrysler Group underscores its strategy of encouraging suppliers to reach “reward” status by announcing two such overachievers have been awarded contracts for an '09 cross/utility vehicle.

Johnson Controls Inc. will supply seats and Magna International Inc. the rest of the cockpit for a CUV slated for late 2008, says Peter Rosenfeld, Chrysler executive vice president-procurement and supply.

All three partners say the comparative wealth of time will yield benchmark results in new technology, innovation and the fine-tuning that can make or break an interior.

Chrysler invited four of its best suppliers to compete, concept-wise, on what they envisioned for the interior.

Rosenfeld says by letting suppliers innovate, using their own expertise and research, the results were surprisingly robust — and he suspects far more creative than if the OEM had directed the project.

He admits Chrysler never really gave suppliers carte blanche before to use their own market research to anticipate what will delight customers.

Chrysler's new strategy comes, oddly, as General Motors Corp. is going the opposite direction, taking back control of interior development from suppliers.

With Chrysler's new initiative, JCI and Magna emerged from the exercise with the go-ahead for a project that technically would not go out for bids in the traditional manner for another year, after which time the quotes still would have to be compared and a decision made before work could begin.

Instead, the suppliers now have 15 months of additional time to design, prototype and test new technology to weed out glitches prior to launch.

Rosenfeld says Chrysler has developed a new scorecard system for its supply base over the last several years, but the idea of categorizing suppliers according to results, and allowing all to compare relative performance and status, is only about four months old.

Top performers are identified as Highly Integrated Partnership Organizations, or “HI-POs.”