GM FastLane Blog

A World Class Day

By Bob Socia
Vice President Global Purchasing and Supply Chain

You don’t read a lot about the tens of billions of dollars of parts and services that GM buys to advance our goal of designing, building and selling the world’s best vehicles. It is important enough that we set aside one day every year to celebrate those suppliers who do the best job of helping us do that.

It is a very select group.  Earlier today, we recognized 76 companies from 16 countries as our 2009 GM Supplier of the Year. To put that in perspective, we work with nearly 20,000 suppliers around the world on a daily basis.

This is the 18th year for the awards and they mark one of the toughest years in GM’s 101-year history. The suppliers who outperformed their objectives in quality, technology, service and price in that environment truly are world class. This group also weathered the most severe economic downturn since the Great Depression.

When I talked with them at the Supplier of the Year business meeting, I wanted to do more than just thank them for their efforts and give them a trophy. I explained how we are trying to fix some problems we have had in dealing with our suppliers.  We have not performed well in the past in surveys that rank manufacturer dealings with suppliers. I am committed to improving our standing. To that end, everyone in the Purchasing organization this year has supplier relationships as part of their performance evaluation.

Obviously, the Supplier of the Year group, which was picked by a global team of purchasing, engineering, quality, manufacturing and logistics executives, has figured out how to best do business with GM.

What I want to show – not so much talk about – is that we are listening to what suppliers are telling us and how we can be better business partners.  That starts with transparency. And it is followed by action.

We implemented a revised supplier suggestion program in which we now share savings 50-50 over the life of the part vs. 65-35 for the first year and 100 percent to GM after that.   We’ve also made it easier to quote on new business, and we have a system for paying suppliers that allows checks to arrive weekly – which stabilizes their cash flow and ours.

We’re not done yet. Karl Stracke in Engineering and Dan Hancock in Powertain are now members of our Supplier Council. We are driving the business together. Our Subject Matter Teams are aligned and we are speaking with a single voice to suppliers.

We’ve looked at almost 400 suggestions from suppliers and our own people and have closed more than 90 percent of them – either changing a process or determining a solid reason to leave an area alone.

These kinds of changes take a lot of hard work and cooperation. We’re moving fast, but real change takes hold over time. If we do a good job, maybe others will do the talking in the future.