SupplierBusiness

The SuRe Index: OEM Supplier Relations Survey

2014 edition supplierbusiness.com

Topical Report

IHS Automotive

2014 edition 2 © 2014 IHS

IHS Automotive SupplierBusiness | The SuRe Index: OEM-Supplier Relations Survey

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IHS AutomotiveSupplierBusiness. Principal Author: Matteo Fini, Senior Consultant, IHS Automotive

ContentsExecutive Summary ........................................................................................................................................................ 4

Quality of relations deteriorates in 2014 as OEMs increase pressure on suppliers to contain purchasing costs .............................................................................................................................................................................. 4OEMs’ pushing the boundaries of cost reduction ................................................................................................... 5OEMs’ lukewarm response to global recalls and Quality Management misalignments .................................... 6OEMs lack consistency in their innovation sourcing strategy ............................................................................... 7

Methodology of the Study ............................................................................................................................................. 8

SuRe Index ..................................................................................................................................................................... 10Profit Potential ............................................................................................................................................................ 10Organisation ...............................................................................................................................................................11Trust ........................................................................................................................................................................... 12Pursuit of excellence .................................................................................................................................................. 12The long-term outlook ................................................................................................................................................ 12

What a High SuRe Means ............................................................................................................................................ 13Cost / Competition Benefits ..................................................................................................................................... 13Benefits in Development ........................................................................................................................................... 13Benefits on Quality and Technology........................................................................................................................ 13

2014 SuRe Index Overall Results ................................................................................................................................ 14FINDING #1: Confrontation on profit-impacting factors is leading to deterioration of relations, results less dispersed. ................................................................................................................................................................... 14FINDING #2: Joint-Purchasing activities of two carmakers often result in a deterioration of relationships with suppliers ............................................................................................................................................................. 14FINDING #3: Chinese OEMs gaining suppliers’ trust ............................................................................................ 15

2014 SuRe Index Ranking – Top 10 Carmakers ......................................................................................................... 17

Profit Potential .............................................................................................................................................................. 18Overall Trend .............................................................................................................................................................. 18OEM level .................................................................................................................................................................... 18

Organisation .................................................................................................................................................................. 19Overall Trend .............................................................................................................................................................. 19OEM level .................................................................................................................................................................... 19

Trust ................................................................................................................................................................................ 20Overall trend ............................................................................................................................................................... 20OEM level .................................................................................................................................................................... 20

Pursuit of Excellence .................................................................................................................................................... 21

2014 edition 3 © 2014 IHS

IHS Automotive SupplierBusiness | The SuRe Index: OEM-Supplier Relations Survey

Overall trend ............................................................................................................................................................... 21OEM level .................................................................................................................................................................... 21

Outlook ........................................................................................................................................................................... 22Overall Trend .............................................................................................................................................................. 22OEM Level ................................................................................................................................................................... 22

SuRe by Region ............................................................................................................................................................. 23NORTH AMERICA ...................................................................................................................................................... 23EUROPE .................................................................................................................................................................... 23ASIA ........................................................................................................................................................................... 24

SuRe by Company Size ................................................................................................................................................ 25

FiguresFigure 1: Top of the SuRe Index Ranking ..................................................................................................................... 5Figure 2: Middle of the SuRe Index Ranking ............................................................................................................... 6Figure 3: Bottom of the SuRe Index Ranking .............................................................................................................. 7Figure 4: SuRe Index respondents by region and company size .............................................................................. 8Figure 5: SuRe Index respondents by sector and function ....................................................................................... 9Figure 6: SuRe Index metrics as a schematic ........................................................................................................... 10Figure 7: VW Group SuRe index ratings 2006–2014.................................................................................................. 15Figure 8: Renault-Nissan and FCA SuRe index ratings 2006–2014 ........................................................................ 15Figure 9: 2013–2014 Profit potential results on scale ............................................................................................... 18Figure 10: 2013–2014 Organisation results on scale ................................................................................................ 19Figure 11: 2013–2014 Trust results on scale .............................................................................................................. 20Figure 12: 2013–2014 Pursuit of excellence results on scale .................................................................................. 21Figure 13: 2013–2014 Outlook results on scale ......................................................................................................... 22

TablesTable 1: Like-for-like Average SuRe and year-on-year fluctuation (calculated including only OEMs surveyed since 2006) ..................................................................................................................................................................... 14Table 2: Like-for-like Standard deviation and difference between top and bottom score (only OEMs surveyed since 2006) ..................................................................................................................................................................... 14Table 3: Sure Index North America Top 3 .................................................................................................................. 23Table 4: Sure Index Europe Top 3 ............................................................................................................................... 23Table 5: Sure Index Asia Top 3 .................................................................................................................................... 24Table 6: 2014 SuRe index by automotive turnover of supplier respondent .......................................................... 25