Published by Auto Business Ltd in conjunction with DRI•WEFA, OEM Sourcing Strategies is a unique study which analyses and highlights the critical variables that determine the attractiveness to suppliers of OEMs’ future product portfolios. By analysing 32 of the most important criteria arranged in nine sections, it provides a framework for decision-making in an increasingly vital area of every supplier’s business program screening by:

• identifying the major trends in purchasing, manufacturing and product development at all major light vehicle OEMs;
  
• assessing levels of corporate and market risk associated with current and expected strategic sourcing policies; and
  
• quantifying the likely volumes for major platforms and individual model programs under development at the same OE

Issues

The analysis of 11 OEM groups, embracing most of the key players in North America, Europe and Asia, illustrates the wide diversity of approaches taken to sourcing strategies, sometimes within OEMs themselves and/or different global regions. The study shows that although there is an increasing focus on a core of supplier selection criteria including design, development, engineering and R&D capabilities, global presence, quality and delivery performance etc, many OEMs continue to take unique positions, reflecting their own philosophies and stances towards competitive advantage.

Although the study focuses on and analyses the key areas of the OEM-supplier interface as dictated by supplier agreements, general terms and conditions and broader sourcing philosophies, we acknowledge the importance of other factors in the overall relationship picture. Such things as interpretation of, and adherence to, agreements/contracts play a vital role, areas where trust, integrity, credibility etc become critical. Although impossible to measure precisely, these factors play a critical role in determining how successful OEM-supplier relationships actually are, and are an additional dimension in sourcing strategy analysis. Goodwill can evaporate quickly if an OEM is perceived to be acting outside the spirit, if not the letter, of supplier agreements.

• OEMs will increasingly focus on strategic sourcing strategies as a means of securing competitive advantage.
  
• Platform rationalisation is well underway but the speed of this varies among OEMs.
  
• Convergence in OEM/supplier relations across the auto industry is apparent in some areas, but key differences in approach will persist in others.
  
• Suppliers are increasingly adopting screening techniques, which mean they select customers and/or model programmes with a view to ensuring acceptable returns.
  
• Some OEMs could find themselves sidelined by key suppliers when new product/process technology is shared.
  
• OEMs are increasingly scrutinising the real abilities of the module and system integrators and questioning the true returns.
  
• Individual OEM sourcing strategies are continuing to evolve, often driven by senior management changes