Supplier Relationship Management: Driving Success in Modern Supply Chains
In this episode of the Auto Supply Chain Prophets podcast, hosts Terry Onica and Jan Griffiths explore one of the industry's most overlooked but critical aspects: Supplier Relationship Management (SRM).
The discussion starts with reflections on Stellantis' layoffs, which got Jan thinking about how OEMs and the UAW still approach negotiations in a transactional way. The same old "tit-for-tat" mindset from her days in the supply chain continues, but the real question is, how can we move beyond this?
Fresh off a trip to Belgium, Terry brings practical insights from a recent conference where she discussed the importance of internal collaboration. With so many moving parts—purchasing, quality, materials management, plant operations—the challenge is how to break down silos and get everyone aligned. The solution? SRM technology. With today's SRM tools, companies can finally achieve a "single version of the truth," enabling real-time data access and more reliable performance metrics.
The recent disruptions have pushed risk management and ESG into the spotlight, highlighting the need for compliance. It's no longer a matter of "should we do this?" but "we absolutely must." Jan and Terry point out that for leaders listening, now is the time to commit to compliance. This is especially true as regulations increase and controls become tighter, making it mandatory to establish effective systems for managing suppliers.
What shines through this episode is Terry's unwavering optimism. Despite being in the trenches of the auto supply chain for years, she stays passionate and hopeful because, as she explains, she's seen it work. She talks about her work with problematic suppliers and how walking them through the steps of MMOG/LE transformed their businesses. Even industries outside of automotive, like medical, have reaped the benefits of implementing these best practices.
Join us for a thought-provoking episode that urges listeners to rethink supplier management and highlights the importance of leadership, collaboration, and a unified approach to data.
Themes discussed in this episode:
- The need for the automotive supply chain to move from transactional to collaborative relationships
- The role of Supplier Relationship Management (SRM) tools in fostering data transparency and shared accountability among stakeholders
- How leadership commitment is essential for driving supply chain transformation and addressing resource constraints
- The increasing demand for rigorous data accuracy and compliance in today’s complex supply chain environment
- The potential of technology to revolutionize supply chain processes and improve overall efficiency
- Why regular evaluations of supplier performance are necessary to encourage accountability and sustained success
- How implementing best practices from frameworks like MMOG/LE can significantly improve supplier collaboration and overall performance
Featured on this episode:
Name: Terry Onica
Title: Director, Automotive at QAD
About: For two decades, Terry has been the automotive vertical director of this provider of manufacturing Enterprise Resource Planning software and supply chain solutions. Her career began in the supply chain in the late 1980s when she led a team to implement Electronic Data Interchange for all the Ford assembly and component plants.
Connect: LinkedIn
Name: Jan Griffiths
Title: President and Founder, Gravitas Detroit
About: Jan is the architect of cultural change in the automotive industry. As the President and founder of Gravitas Detroit, Jan brings a wealth of expertise and a passion for transforming company cultures. Additionally, she hosts the Automotive Leaders Podcast, where she shares insightful conversations with industry visionaries. Jan is also the author of AutoCulture 2.0, a groundbreaking book that challenges the traditional leadership model prevalent in the automotive world.
Connect: LinkedIn
Mentioned in this episode:
- Attend QAD Transform Americas
- Global MMOG/LE Standards for Automotive Suppliers
- Global MMOG/LE Implementation Training - 6th Edition
- IATF 16949
- The 24 Essential Supply Chain Processes
- QAD SRM (Supplier Relationship Management)
- 24 Essential Supply Chain Processes Worksheet for Supplier Performance
Customer Case Studies:
- Kromberg & Schubert brings its supplier data into a centralized system with QAD SRM
- Grammer AG leverages QAD SRM to bolster sustainability in the global automotive supply chain
- Long-standing partnership with QAD SRM helps drive AVL’s continued success
- QAD integrates with BMW group’s systems and processes
Episode Highlights:
[01:05] Let’s Talk About SRM: Reflecting on the recent layoffs at Stellantis, Jan points out that closer collaboration between OEMs and suppliers is necessary. This discussion leads to the topic of supplier performance and how using the right management tools can significantly enhance how suppliers perform in today's complex supply chain.
[04:45] Navigating Compliance Changes: With stricter compliance standards shaking up the automotive industry, the focus is now on the critical need for effective risk management and collaboration across the supply chain. Learn from Terry and Jan how bringing all data together can transform supplier relationships and boost performance in these changing times.
[08:27] One Source, Endless Possibilities: Terry dives more into the importance of having a single source of truth in supplier data, enabling teams to address issues before they escalate. She also points out how important it is for suppliers to embrace ESG principles and robust risk assessments, ensuring that everyone in the supply chain stays connected and accountable to deliver on time.
[14:31] The Secret to Supply Chain Success: “We need more rigor,” Jan says as she talks about supplier management in the automotive industry with Terry. They stress the importance of ensuring suppliers follow through to keep everything running smoothly rather than just having requirements in place.
[18:00] Transforming Challenges into Wins: Terry shares the secret behind her relentless positivity: witnessing the transformation of struggling suppliers into success stories. By focusing on the "why" behind compliance and implementation, she helps teams embrace change, reduce inventory, and improve efficiency, proving that positive results are always within reach with the right approach.
[20:46] Join the Movement: Eager to share her passion and knowledge, Terry invites listeners to connect with her. With exciting collaborations, including a session with Moog Medical at the Transform Conference, she proves that the principles of supplier management can drive success across industries
Top Quotes:
[07:15] Jan: “We need one source of the data that we can all agree on. And I don’t want quality sniping, going, oh yeah, but that came out of the purchasing system, so we know that's not really right. Oh, we've got this spreadsheet that we use at the plant, and it's much more accurate. Those days are gone. They have to be gone because here's the thing: if we do not get our arms around the transactional, as much as we like to say, "Oh, we need to be more strategic and collaborative." You've got to have the transactional basics in place before you can even launch into more of a collaborative type of relationship. And now, we've got the technology, it's out there, it's available, but we've got to figure out a way to implement it, but more importantly, let's get all the stakeholders together to agree on this one source of truth, and all use it. Let's all use it together.”
[08:28] Terry: “If there's one version of the truth, anybody at any time can go in and look at it. If the data looks questionable, you can start asking questions right away. You don't have to wait till your annual risk assessment on your suppliers, or you have to wait till the supplier really does something problematic, right? You can be looking at that ahead of time and fixing those problems, right? It's not hidden. And when everything's pocketed away in different systems, that's why I think suppliers get frustrated. It's like, can't you all see what each other's doing? And I think that's what the beauty is of these supplier relationship management tools.”
[13:16] Terry: “When a disruption happens, my favorite example was General Motors back in the tsunami; nobody mapped. Remember when that tsunami hit? Nobody knew how bad it got. It hit everybody. But then, after that, General Motors implemented supplier mapping. I think it was like two years later, there was another one and it took them like six weeks the first time to identify their supply base. It took them like six days the next time. Just by implementing something as mapping. And so, that's why when we put these in the standards, we do this because we know it's going to help you to get better. And again, a lot of people say, "Oh, this is a lot of work," but it's probably not. And the things that you're missing are probably things that you really should have.”
[14:47] Jan: “I don't credit Volkswagen for too much, but I will credit them with their ability to launch new products in the systems that they have. They used this word with me once, and I'll never forget it. "Rigor." The rigor of your implementation, particularly during a new program launch. Making sure that you've got all of these things in place. You can't launch a VW program with a checklist and go, "Yeah, we've translated all your requirements down to our supply base. Yeah, we're good." No, that doesn't fly. They'll have people in your facility and check with your suppliers to make sure that it's all done. And it's this word rigor, and that's what we need. We need more rigor. It's more in the how and the approach than it is in the what.”
[19:15] Terry: “The other thing is after I go do MMOG/LE assessments, I always follow up six months later, and I always say, “Give me your honest feedback. Was it a waste of time, or did it help?" And you know, it's always like your parents, they're telling you, do this, do that. You hate hearing it, right? And then, as you grow older and you understand, you're like, "Oh, they were right. I understand why they were beating me over the head to do that or why they were making sure." But, Jan, I see the results. Anywhere from 15 to 60 percent reduction in inventory just by picking up some best practices.”
Transcript
[Transcript]
[: [: [: [: [: [: [: [: [: [: [: [: [: [:One thing I want to go back to some of the things that people need to be looking at definitely need to be understanding ESG. So, you need to make sure your suppliers are considering the ESG, right? They got to get that into their culture as well, too. So that's business ethics, working conditions, things like that. And then, you have to confirm, if you're Tier One, that your suppliers are doing the same, that they're passing that requirement down. So, in MMOG/LE, the last few versions, there's a lot of stuff that needs to be passed down really to get the supply chain connected, but looking at your formal agreement, so your Terms and Conditions from a delivery perspective, or a supply chain perspective, supplier mapping. We know how important that is now as we move suppliers around, or as we have these disruptions, make sure they have a risk assessment, contingency planning, they're doing EDI, or they can do a web-based tool, but again, passing that demand down quickly. We have to make sure they do that capacity, production flexibility, ops lessons, packaging and labeling, and shipping specifications, just to name a few. So, you know, again, get together between all those groups and are we doing that? It's not just about quality, right? We got to make sure they're doing all these delivery things. We don't want late parts, and we know how important the supply chain is right now. So, this is that list that I've created that we'll put in the show notes. It's just a great checklist. Let's look at, again, purchasing, materials, and quality, and I even include the plant manager and get that feedback. Are we doing these things?
[: [: [: [: [: [: [: [: [: [:The other thing is after I go do MMOG/LE assessments, I always follow up six months later and I always say, "Give me your honest feedback. Was it a waste of time, or did it help?" And you know, it's always like your parents, they're telling you, do this, do that. You hate hearing it, right? And then, as you grow older and you understand, you're like, "Oh, they were right. I understand why they were beating me over the head to do that or why they were making sure." But, Jan, I see the results. Anywhere from 15 to 60 percent reduction in inventory just by picking up some best practices. A lot of times, they're doing a lot of good things. There are just a few big things you are missing, right? That just makes me feel so good. I hear a lot of times, "Oh, our suppliers aren't going to want to do EDI with us. It's every assessment; they're not going to want to do it."
[: [: [: [: [: [: [: [: [: [: [:Are you ready to find the money in your supply chain? Visit www.autosupplychainprophets.com to learn how or click the link in the show notes below.
