Chrysler to Measure Supplier Performance

When I woke up this morning, I read this article in the Car Connection about how Chrysler is reshaping its Supplier Strategy to "reward the best" and "boot the worst". Now, if you talk to any tier 1 or tier 2 automotive suppliers about their views of the domestic OEMs and how they treat their supply base in general, chances are that an obscenity will come up in the first 10 seconds of conversation. So when I saw this piece, I was mildly surprised.

It turns out that the crux of the article is that Chrysler is implementing a new type of actionable scorecard that will take into account "four key considerations: quality, technology and performance, as well as cost." This theme fits nicely with the Supplier Performance area which we’ll be exploring here at Spend Matters later this week and next. While I'd argue that implementing a new type of scorecard and a new supplier management philosophy is just a start to developing the right type of supplier relationships that fully take into account total cost, it's certainly a move in the right direction for Chrysler -- and the domestic automotive industry in general. And it's further proof that companies large and small are embracing a Spend Management approach -- that goes beyond point fixes -- to managing their businesses.

Jason Busch

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