Less remote work propels automakers in supplier relations, study says

In-office work requirements coincided with improved supplier relations for six major automakers, marking the first broad improvement in 26 years. A supplier relations index survey conducted from March 3 to April 17 collected 750 responses. Ford recorded the largest increase, while Toyota maintained the strongest supplier relationships. The improvement is linked to benefits of face-to-face collaboration, including faster issue resolution and increased knowledge. Supplier relationships are critical because automakers depend on suppliers for vehicle production. The index improvement correlates with better financial performance and can support higher product quality, reduced downtime during supply disruptions, and improved product launch experiences. Toyota’s score rose to 409, surpassing 400 for the first time since 2007.

"What you see in here is an increase in all the things you get when people collaborate face-to-face," Johnson said. "Hey, I can solve issues faster. My knowledge went up. All of those great things went up in the past year. And then you start to see this piece of the pie getting better, because this piece of the pie got better.""

"Automakers can't make a vehicle without their suppliers, so relationships with those partners are critical - especially at a time of "perma-crisis fatigue" where purchasing departments have faced challenge after challenge over the past few years, Johnson said. Improvement on the index correlates with better financial performance, she said. Additionally, better supplier relations can result in better product quality, less downtime in the event of a supply challenge and an improved product launch experience, she said."

"On the index out of 500, Toyota topped the list at 409, an improvement of 23 points, surpassing 400 for the first time since 2007 and yielding its second-highest score ever (it reached 415 in 2005 and 2007)."

"The increase across companies, though, is somewhat surprising, given that a new presidential administration bringing changes in trade policy, shifts in electric vehicle priorities and foreign conflicts could create the conditions for tense pricing negotiations, said Angela Johnson, principal in Plante Moran's automotive and mobility consulting practice."

Read at Chicago Tribune