CAR study uncovers errors in suppliers’ business management process

Manufacturing News, Source : TheManufacturer.com
Published : 09 Aug 2002 21:01

The Center for Automotive Research (CAR)’s latest study revealed serious problems in auto suppliers’ internal processes related to quoting and managing new business opportunities and engineering changes.

The revenue acquisition management survey was conducted in July and sought to gauge how many suppliers carry out the revenue acquisition process, how well it works, and where improvements are needed.

The study concluded that nearly one-third of suppliers reported errors in pricing being submitted to auto OEMs. Respondents reporting their RFQ pricing models have a typical variation of about 25% from actual cost. In addition, the suppliers’ win rate is only about 25%. Suppliers respond to an average of 390 RFQs a year and expect this number to increase by 25% in the next five years. One-third of the suppliers surveyed reported that collaboration with sub-suppliers is a major problem.

David Andrea, CAR forecasting director, said in response to the findings, “Several of the major suppliers have caught on immediately in our discussions with them about the concept of revenue acquisition management. They know their current processes are simply not where they need to be in terms of speed, accuracy, global vision, access pricing and profit history, and all other factors that go into customer relationship management.”

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