Thursday, August 23, 2007

Chrysler exec: Top suppliers must police their suppliers

Ralph Kisiel
Automotive News
August 23, 2007 - 2:07 pm EST

DETROIT -- Chrysler LLC wants its Tier 1 suppliers to be more diligent in monitoring, disciplining and rewarding their own suppliers.

It's not easy, said Jill Gafner, Chrysler's manager of supplier quality training, who acknowledged that the automaker already gives its Tier 1 suppliers a lot of responsibility.

But gone are the days when a Tier 1 need only look down the block or in a neighboring state to deal with a problem with its suppliers, said Gafner, speaking here at the Automotive Industry Action Group's AutoTech conference and exhibition.

"We have to have 3.5 million perfect parts every single day," Gafner said. "It's humongous."

But you can't find your suppliers in your back yard anymore, she said.

So in addition to requiring Tier 1 suppliers to eliminate waste, continue competitive pricing, provide zero-defect parts and offer innovation, Chrysler's Tier 1s also must be more diligent with their own suppliers, Gafner said.

She would not cite specific suppliers but said that once a product design is approved by Chrysler, there are no unauthorized part changes allowed by any lower-tier suppliers.

"You can't change anything without our approval, and Tier 2, 3, 4 and beyond need to know that as well," Gafner said. "You have a full chain of suppliers, so make sure you take your suppliers and you identify our quality to them. Make sure you train them, empower them with knowledge. Tier 1s need to let the suppliers know all the way down the supply chain: We don't put up with defects. Our goal is zero defects."

Chrysler expects its Tier 1s to communicate with their suppliers, or learn to "re-communicate because we are now doing it across the world."

According to Gafner, Chrysler also expects its Tier 1 suppliers to:

* Monitor the performance of suppliers regularly and make them accountable for their performance.

* Teach them how to monitor themselves.

* Define penalties for noncompliance.

* Reward suppliers for doing something right.

* Use value-stream mapping to visually analyze the flow of materials from suppliers.

Gafner added that Chrysler's Tier 1 suppliers must keep communication open at all levels.

Said Gafner: "There's not a system in this world that will replace a solid handshake and solid eye contact."

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