Major Responsibilities of Each Organization

International Procurement

• 
  Provide Procurement support to off-shore assembly and manufacturing locations
  
• 
  Identify and develop suppliers in the host country to provide for Local Content
  
• 
  Facilitate the establishment of Chrysler’s key North American Suppliers in foreign locations
  
• 
  Provide a liaison function between P&S International Operations and the Platform Engineering teams
  
• 
  Provide Supplier Quality training and guidance to off-shore Chrysler locations including certification of in-country approval labs
  
• 
  Assist in the resolution of parts shortage issues associated with International Supply
  

Gary has a total of 45 years experience working in the automotive industry. This includes 15 years of experience working with Chrysler, and 15 years prior to that working with AMC. He has been Head of the Supplier Development group for 1.5 years. He reports to Cindy Hess, who is head of Supplier Quality, and also to the Platform Supply Group (formerly headed by Steve Zimmer). This was effective as of March 1996, (the latest iteration of Chrysler’s organization). The Supplier Quality group consists of Supplier Measurement and Feedback, Quality Process Improvement, Process Specialists, and Supplier Development and Technical Assistance.

• 
  Choose to ignore the problem
  
• 
  Don’t take the problem seriously
  
• 
  Have serious financial problems
  
• 
  Have senior managers who have the wrong philosophy.
  

In such cases, these suppliers are chosen for supplier development activities. Some of the other criteria that are used to involve a supplier include:

• 
  At least $1 M business a year with Chrysler
  
• 
  Part of sourcing strategy for at least the next two years (parts for model)
  
• 
  Have been identified as having a serious poor quality track record (PPM) as and a referral for assistance either from manufacturing, warranty records, or recent product launch and delivery data
  

• 
  These problems have been systemic for at least the last two years.
  

These type of records essentially “tell a story” regarding the supplier’s history of continuous problems. The normal quality organization is unable to handle it. They may or may not have had a process specialist come in already. In such cases, these individuals have been unable to deal with the problem, or the specialist has realized that a more serious problem lay behind the supplier. In such cases, an on-going dialogue with these suppliers has provided them with many directions for improvement, yet they have continually been unable to comply, and continue along a different path with a different agenda. In such cases, the fundamental question is WHY? When this occurs, Gary’s people are called in. Although they may involve the process specialists later on in the SD process, this type of situation clearly calls for a different approach.

1. 
   The supplier receives a letter signed by the commodity manager and Gary that states that “we want to help you maintain your position as a major supplier for Chrysler.”
   
2. 
   A meeting is held with the senior executive, top manufacturing manager, and top quality manger. At this meeting, Chrysler defines “why we’re here”, and emphasize that they seek to work within a win/win environment. They want to help the supplier maintain their position with Chrysler, and then present the performance indicators (“hard facts”) that explain why we are here (quality, delivery problems, etc.) In most situations, this initial meeting is welcomed with accolades; as it is an opportunity for free help! These conversations are held in extreme confidence, and no one can use it is future price negotiations, etc.
   

(It should also be noted that supplier development efforts in some cases still do not work. Some suppliers do not respond after multiple interventions. Even though they are “saying the right things”, nothing happens. Involvement with suppliers spans between 6 months and 1.5 years on average. 80% of the time, there are significant performance improvements. In 20% of the cases, there are none.)

3. 
   In the next phase, teams of two people are dedicated to a supplier location. All of these individuals are QS 9000 trained. The same executive from Chrysler who initially met with the supplier accompanies the team to meet with the plant management group, to prevent any perceptions of confrontation that may exist.
   
4. 
   This is followed by a 2-3 day assessment (this is NOT an audit). The assessment identifies “what they do well”, and where they fall short. The assessment is structured as follows:
   

• 
  Beginning with top management: “Is there a business plan? What is the operating / management philosophy?”
  
• 
  It assesses all segments of the organization, including quality, purchasing, and engineering, materials handling, preventive maintenance, tooling, etc. What are the strength and weaknesses of each area, and what is the action plan to carry out and address each of the weaknesses.
  
• 
  The assessment is held in extreme confidence. Only the top managers within the SD group are in contact with the top managers, and the information is not shared elsewhere within Chrysler. The SD people at Chrysler will not share the specifics of the supplier’s problems, even with the commodity group managers at Chrysler. This is done to ensure that the supplier who shares information with the SD group can provide all required information so that they can truly help, without risk of jeopardizing their position!
  

5. 
   The outcome of the assessment is an action plan. This plan outlines which people in the organization are responsible for working out the problems. This typically involves a set of 1-2 day visits, 1-2 times per month. These visits may be to the manufacturing site, or to the company’s headquarters, depending on the nature of the problem. In some cases, Chrysler’s intervention identifies the problem as being the communication between the plan and the engineering facility as the root cause of the problem.
   

“Buyer Development” – Becoming a Better Customer Chrysler is also introspective with respect to their role in supplier development, and often seeks to “look in the mirror”. This is done to enhance the positive nature of the “partnership”, especially in cases where Chrysler has invested in the supplier a lot over the years and has developed significant commitment. However, in cases where a SD project is underway with the supplier, no new volumes on new projects are committed to with the supplier. Even in situations of extensive commitment, if the intervention is unsuccessful, then Chrysler may need to switch suppliers.