Do Parts Suppliers Matter More than Manufacturers?
Tim Esterdahl | Feb 24, 2014 | Comments 9
An interesting trend has been happening of late – automotive suppliers are getting quite a bit of attention.These days, more and more manufactures are blaming parts suppliers for recalls. Cummins diesel engines are all the rage (not just a diesel engine, but a Cummins). And now, news of Tesla and Apple working together to build an iCar. This begs the question – are manufactures becoming less relevant? Does Toyota even matter or do their supplier choices matter more?
With all the part suppliers news lately, are they becoming more important than manufactures?
I realize the above thoughts aren’t exactly “automotive news,” but follow along with me here. There are several news items of late that got to me to wondering about this.
For example:
- Toyota recalled 109,000 Tacoma pickups because of a part failure that they say came from an Ohio supplier. They have since switched suppliers.
- An Autonews.com story it was supplier BorgWarner who first approached Ford with the idea of a turbocharged engine, not the other way around. The story goes that without BorgWarner’s insistence, the EcoBoost wouldn’t have happened. Good story, check out the link.
- Media reports state Tesla is working with Apple and they may develop an “iCar.” The interest here is Apple and less about Tesla.
- Consider the rise of ZF and their 8-speed transmission with Ram. ZF is just a supplier that has seen their stock rise almost overnight. At the 2014 Detroit Show, both ZF and Asian had displays (a first for me).
I would also submit that in the world of computing, this switch is already occurring. Consider that you used to buy an IBM computer. Yet, these days, the marketing is “Intel inside” or “Powered by AMD,” instead of you are buying an IBM.
This brings me back to my original question. Are suppliers getting so popular that they will outweigh the larger, manufacture’s brand? Maybe, Consider last weeks news that the next-gen Tundra could have a Cummins engine. That story captured the media’s attention and it was all about Cummins and less about Toyota.
If suppliers significance grows, does this help Toyota’s brand with their known high supplier quality requirements? Maybe so. The reality is that parts suppliers are now in the driver’s seat. They now pitch new ideas to manufactures trying to meet CAFE requirements and fast changing technology advancements. This hasn’t always been the case. In the past, automakers would dictate to suppliers what they wanted.
For example, many automakers have been pressing Alcoa for the secrets behind the F-150’s aluminum panels. In the past, automakers wouldn’t have had to press any supplier for information. The supplier would have simply bent over backward to give it to them. In fact, the aluminum F-150 was only possible with Alcoa’s help. You begin to wonder if Alcoa approached Ford or if Ford approached Alcoa.
Keep in mind that parts suppliers don’t have to share these ideas. The sharing seems to come down to basic things like trust and communication. Autonews.com has this tid-bit in their story:
Last year, consultant Planning Perspectives Inc. asked North American suppliers whether they were willing to share new technology with automakers without a purchase order. Ford ranked third, behind Honda and Toyota. GM ranked fifth out of six automakers studied.
Can we then expect Toyota to continue to develop quality products BECAUSE OF their relationships with their suppliers and not Toyota themselves?
What do you think? Did you think about parts suppliers when you bought your truck?
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Filed Under: Auto News
This is a good subject and all people should spend some time looking into the issue. We are now in a world market and those who put a sticker which says “Made in USA” on their truck had better start paying attention.
This is the truth. A few days ago a RAM 2500 passed me in town the owner had a big sticker in the window
“Hecho En Mexico”
I may put a bit sticker on my RAM “Made in USA” and see if anyone ever comes up to inform me of where it really came from. I guarantee this, if one day someone does approach me it won’t be a UAW member. They sure would’t know.
I will be able to drive my ram all over Detroit while Tundra owners will have rocks thrown at them.
The manufacturer is still 100 percent responsible for the final product no matter what company they use. They need to evaluate the parts before they commit. This is nothing new. For years Budd company in Philadelphia made body parts for GM.
To answer your question: it depends. Sometimes manufacturers design the component they want the supplier to build. So if the flaw is in design it isn’t the suppliers fault. If the flaw is in quality contol then it most certainly is the supplier’s fault. Alternatively, suppliers like Cummins, Aisin, BorgWarner, ZF, Nippondenso, American Axle, Timkin, etc all have their own designs that may be used on a truck, but its the manufacturer that agrees to use the product on their namesake. Are suppliers important? Absolutely! Does it make a difference to me/will it influence my decision to buy a certain truck? Not necessarily. However, a certain supplier might give me more of a warm and fuzzy over another (i.e. Dodge Cummins with Aisin transmission vs the Chrysler made transmission), but I can’t say it would influence me negatively, only positively.
good point. The mfg. is of course only as good as their suppliers. GM use to in the 90’s and early 2000’s have major parts shortages under warranty in my experience. I got SO sick of waiting a month or more for one little warrantied part to come in. So far, Toyota parts have been in no problems within a week once ordered vs. my GM experience.
I know for a fact in 2007 toyota had supplier chroming issues on their bumpers and lug nuts rusting in less than 20K miles. Am sure in/around 2009 toyota either changed suppliers or got fed up with replacing rusted chromed bumpers and told their supplier to get it right or else gone.
I also know according to a local toyota service mgr. and thur my experience the past few years that corp. toyota is stiffening up their warrantied items NOT replacing them at the dealership level first without having to get regional mgrs. involved which I don’t like thus having to go back and back and back 2-3 times to get approval on something that should easily be replaced under warranty with NO issues at all. Sorry, off topic but does relate to suppliers.
Engineering is often confused with facilitation in other industries. Arrangement of known pieces on a board is easier, quicker, and far less expensive than creating pieces and assembling them for a new purpose.
Yes they matter, I prefer parts made by, or for, Toyota and TRD.
If you think a supplier that sells to all manufacturers is giving them all the same stuff to the same design specifications you may be missing how it works.
Some are completely designed by the manufacturers (with or without assistance for the supplier) and the supplier contracted to build the specified parts and assemblies.
I think they do. I’m a perfect example of this.
I would not have bought my Ram with a Chrysler trans in it, NO WAY.
The fact that ZF made the trans allowed me to buy the truck.
So far, the ZF has been awesome and lived up to the reputation they have. It really changes the truck.
Yes this is some thing every auto manufacturers looks at , you know quality is a monetary negotiation. When you run into a quality issue you’re discussing money every time. What you want to focus on, though, is getting the right quality parts at the right time, which takes some up front work. You’ve got to define your exact quality specifications and make sure the supplier has the capability to support those specifications. Doing this is good for costs and it’s good for building successful supplier relationships.
Just to clarify IBM sold there computer division and its employee’s to a Lenovo almost a decade ago. So you can’t actually buy an IBM computer anymore even if you wanted to.
Good point Damon. I was really just trying to make an analogy.
-Tim