Tuesday, January 04, 2005

 

The Cost Of Doing Business The Wrong Way

John Henke of Planning Perspectives has issued a report stating that the Big Three pay 8% more than Honda or Toyota do for the identical part, even when it comes from the same supplier (sorry, no link to the story - it was something I was reading in Automotive News). I've got my own thoughts on this, and maybe I'll put them on the screen if I can craft something that's somewhat coherent. But for now, I'll let the Autoextremist do the talking:

But Detroit is continuing on its path of more and deeper cuts in its quest
to gain even more efficiencies, with little attempt at building partnerships
with suppliers except in the cases when they just can't get the job done without
them. And even then it's done with a grudging acknowledgment instead of a sense
of appreciation. In the midst of all of these maneuverings is the reality that
the manufacturers are looking to China as the Holy Grail for reduced supplier
costs, and they're willing to leave long-time contributors to their efforts
broke and busted at the side of the road if they have to. Executives in Detroit
continue to scratch their heads as to why Toyota is this seemingly unstoppable
juggernaut. They point to the obvious product and marketing successes, but they
never mention the fact that Toyota has developed a legion of loyal suppliers
based on a relationship of mutual respect - and not one of intimidation or
threats. And lo and behold, suppliers actually want to work for Toyota. They
want to give Toyota their best creative thinking because they enjoy a level of
trust in their professional relationship that Detroit can't match. (Rant 241)


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