As automotive supply chains are some of the most complex in the world, supplier choice is critical to OEM success.
But suppliers can provide OEMs with more value than the timely delivery of manufactured products. BMW, for example, has long recognised that working with your suppliers is necessary for consistent innovation. Suppliers also benefit from building partnerships with OEMs. For suppliers, these relationships lead to higher adaptability and new revenue streams — according to this Deloitte study.
Considering the role that suppliers play in driving OEM success, it’s important to ask yourself — “What do my partners expect from me? And am I exceeding their expectations?” Suppliers who fail to maximise their value may find themselves outcompeted and replaced.
We’ve developed a supplier checklist to help automotive designers address these issues and meet OEM demands.
1. Support and customer care
Good suppliers want positive business relationships, especially as poor customer support can lead to slow service, shipping errors, and profit loss. OES companies can avoid this by investing in digital tools and staff to manage their partnership with manufacturers.
To evaluate how important customer care is to your organisation, ask the following questions: how often do you engage with your partners to understand their expectations and requirements? How easy is it to query issues with your company and how quickly do you respond to issues? When developing new products, do you invite your partners into the process? Finally, do you use Customer Relationship Management (CRM) tools to streamline customer care and support?
2. Quality and reliability of output
Consistency is everything when it comes to design. One bad batch could mean recalling an entire fleet of vehicles. Hyundai, for example, is spending $900 million to recall 82,000 faulty electric vehicles.
When measuring for quality, ask yourself; how consistent is your quality of work? What are your quality control procedures and how transparent are you with your criteria? And how often do you audit your manufacturing process? We at tesa, for example, conduct rigorous product tests. Our reliability has won contracts and co-creation opportunities with top players in the industry.
3. Global production requirements and capability
For growing OES, you need suppliers who can continue meeting your needs, irrespective of where you operate. For example, you might want to open a production facility in a country you haven’t previously operated in. This opens up supplier logistical challenges.
Ask yourself: how easily can your suppliers align with your growth strategies? And how capable are they at meeting increased supply demands? Do they have relationships with subsidiaries or third parties who can deliver materials? What production capabilities do you require — and what might your worldwide capacity look like?
4. Legislation and compliance
Automotive suppliers that have been audited and found compliant by compliance bodies — like the International Organization for Standardization (ISO) and the International Automotive Task Force (IATF) — can guarantee that they follow current product production standards.
At tesa, we’ve achieved IATF 16949 certification. This shows our auto partners that we can meet their requirements efficiently and effectively through our focus on continual improvement and process-oriented quality management.
Another issue is to ensure that both you and your suppliers are compliant with environmental and manufacturing legislation. Compliance failures may lead to future supply disruptions or fines. To assess your compliance, ask: to what standards are you accredited? Do you have robust, government-approved processes in place to enable streamlined development/sourcing?
5. Scaling and innovation
How innovative are your solutions? And how innovative are your suppliers? Do they have global development and research houses to support ongoing expansion? And do they introduce any innovations across your product line?
By introducing better products and boosting their performance, OES that emphasize innovation continually increase the value of their partnerships. These partnerships may lead to another avenue of opportunity — product co-creation.
By working with suppliers and OEM during the manufacturing process, you can co-create superior products that more comfortably fit the unique needs of each vehicle. For example, auto manufacturer SAIC Motor has recently partnered with massive technology company Alibaba to co-create Zhiji Auto — a $1.5 billion EV project. By marrying SAIC’s car manufacturing experience with Alibaba’s big data and cloud computing technology, they aim to offer more car services and applications.
If you’re curious about the benefits of co-creation, then read this article. In it, we uncover what co-creation is and how it can lead to better, more innovative products.
Evaluating your company and changing your suppliers
From pushing product innovation and achieving environmental compliance to offering the most competitive rates, it can be difficult to find the ideal supplier. Using the above checklist, you can develop a scorecard to evaluate both your performance and that of your automotive suppliers. Consider adding extra weight to the categories that are more important to your manufacturing context.
After weighing up all these factors, along with how automotive supply chain issues impact your products, you should know how successful you are at meeting OEM demands. Use these same criteria to audit your automotive suppliers and consider changing to those suppliers that both meet and exceed your expectation.
By partnering with high-calibre suppliers, you’ll be in a better position to drive success and help take next-generation vehicles to market.
How tesa can help
At tesa, we’ve supplied mounting solutions to the world-leading OEMs and OES. Our powerful attachment part mounting solutions, for example, withstand static and dynamic stresses, ensuring that attached parts stay secured through the lifetime of the car.
We’ve also written a free ebook to help electric vehicle manufacturers both maximise supplier value and improve their product development process. Along with our tips on evaluating suppliers and driving innovation, we share insights into the latest automotive megatrends. You can download our guide for free by clicking the button below.
