Closer ties between purchasing and product development at General Motors may bring parts makers into the process earlier, according to analysts at SupplierBusiness.

At the weekend, suppliers were mulling over the effects of General Motors' management changes, including the overlay of a new executive on top of purchasing.

The first signs are positive. The result could be Japanese-style linkage of purchasing and product development that involves parts makers earlier in the process, as well as taking into account their concerns and heeding their recommendations.

In short, the changes could herald a new system that results in more partnership between suppliers and the automaker. That's clearly what the federal task force that looks over GM's shoulder wants.

Still, supplier executives are adopting a "wait and see" attitude. Too many times, lofty goals have crashed and burned among the Detroit Three.

Bob Socia has held GM's top purchasing job for only a couple of months and already has a new boss - Tom Stephens, vice chairman of Global Product Operations. Socia's predecessor, Bo Andersson, reported directly to GM's CEO.

The new CEO is Ed Whitacre, who took over last week on an interim basis while a replacement for Fritz Henderson is sought. But Whitacre's approach to supply chain management is a big question mark. The former AT&T boss does not have the kind of industrial background that Ford chief Alan Mulally brought to his job.

Mulally came from Boeing, which operated with deeply integrated vendor relations. He brought with him a highly-evolved philosophy of supply chain management that has come into play at Ford.

As the former head of AT&T, Whitacre is not understood to have developed detailed opinions about how component manufacturers should interact with a maker of finished products - if only because he operated in a different kind of business environment.

That could a problem at GM, but so far seems to be more of an opportunity. Socia comes out of GM's cost-based purchasing tradition, although presumably is now freer to initiate his own systems with Andersson no longer in charge.

But the key men in the new purchasing mix at GM could be Stephens, who adds purchasing to his portfolio, and Mark Reuss, who last week went from being in charge of global engineering to the head of North American operations.

Stephens will be the interface between buying components and developing products. He can override cost concerns within the purchasing group in favour of technology solutions.

Reuss was seen pushing for more robust parts and systems during his two-month tenure as engineering chief. Supplier executives say he also seemed to understand that basing decisions solely on price, and making sourcing changes after a vehicle program is underway, creates hardships for both suppliers and manufacturers.

His goal, at least as expressed in supplier council meetings, has been more stable relationships.

Indeed, that's a concept promoted by the federal task force, which studied Japanese operating systems, notably Toyota's, in areas such as supplier relations.

That may be why Stephens, the top product development executive, has given responsibility for purchasing and why Reuss seemed to make an effort while the company's top global engineer to consult more closely with suppliers.

Supplier sources say that during his brief turn as engineering chief, Reuss has taken time to meet regularly with key suppliers to discuss past problems and determine how parts makers see ways for GM to improve. He will now have more authority to bring about that kind of change as head of North American operations.

His goal appears to be a long-term partnering with suppliers, with a strong emphasis on getting technology into the system faster. If that works out, last week's changes at GM are good news for suppliers.
 
This article was supplied to just-auto by SupplierBusiness, an IHS Global Insight company.

See also: US: New CEO reshuffles GM management deck