Wednesday, December 08, 2004

Building Deep Supplier Relationships

"In my opinion, [Ford] seems to send its people to 'hate school' so that they learn how to hate suppliers. The company is extremely confrontational. After dealing with Ford, I decided not to buy its cars". (Sr executive, supplier to Ford, October 2002)

"Toyota helped us dramatically to improve our production system. We started by making one component, and as we improved, [Toyota] rewarded us with orders for more components. Toyota is out best customer". (Sr executive, supplier to Ford, GM, Chrysler and Toyota, July 2001)

These are serious quotes of course. Jeffrey Liker and Thomas Choi give some more of these quotations plus recommend the following steps for companies that want do something about this and are interested in building deep supplier relationships with their supply chain partners as Honda and Toyota do (Harvard BR Dec04):
  1. Understand how your supplier work,
  2. Turn supplier rivalry into opportunity,
  3. Supervise your suppliers,
  4. Develop suppliers' technical capabilities,
  5. Share information intensively but selectively,
  6. Conduct joint imporovement activities.
Being nice is not on their list.