One simple message leaps from the data in this survey. In the new era of supply-chain management within the extended enterprise, the primary concern of all suppliers is to improve the quality of their relationships. Better understanding of suppliers and customers, better communications, more flexible production systems, and closer integration of R&D all point to the rhetoric of the 'shared destiny' relationship being translated into reality. The difficulty for suppliers throughout the supply chain is that each vehicle manufacturer has a unique approach to procurement. Despite various moves to harmonize basic requirements such as quality levels, suppliers have to customize the relationship with each vehicle manufacturer.

There is clear evidence of a shift in focus in the automotive industry from the first Tier - vehicle manufacturer link, to further down the supply chain as best practice is disseminated. The suppliers that face the greatest challenges are those which are marginal first Tier suppliers, or in the second Tier. Often caught in a cost reduction squeeze from their first Tier customers, and a price increase from their materials suppliers, second Tier suppliers may lack the depth and breadth of management expertise to cope with the diversity of challenges to their business. They often have the ambition and indeed the potential to retain independent status, and are the most likely to turn to third parties for all sorts of functions from training and market development to IT strategy. For those plants which are part of larger groups, as is often the case, a key issue is of course the degree of control that plant level management has over a range of issues. IT policy may be determined centrally.

Inter-country comparisons/patterns are more difficult to discern compared with size/Tier issues. Behind the data is a tale of turmoil in the second and third Tiers for all countries. The survey clearly shows the first Tier and large firms are leading the way on a number of issues such as JIT and flexibility, as may be expected. But the larger suppliers are much more likely to be concerned with issues such as integration of R&D, prototype development, etc. than those lower down. In contrast, the third Tier suppliers still show concern for more traditional aspects of business: be they integrated payroll and stock control systems, or sales and marketing.

Suppliers in Germany remain most concerned about costs within the context of concerns over the German location ('Standort Deutschland'), and about securing their lead in advanced automotive technologies. It is interesting to note that responses from suppliers in Spain closely parallel those from suppliers in Germany. It is significant that many suppliers in Spain are German-owned, and increasingly serve vehicle manufacturers in Germany. US suppliers are most concerned about increasing flexibility and developing closer links to their customers.

The Automotive suppliers face the following challenges:

How to get closer to their customers
... improved EDI linkage

Assemble to order
... customer demand cascade from distributor through supply Tiers

Changing customers from OEMs (constructors) to Tiered suppliers
... different scheduling techniques and stability

... increasing scope of supply

... increasing complexity and control requirements

Pressure on costs
... open book relationships

Competition from lower cost rate countries
... dealing with import of supplies

Technology changes that could lead to losses and gains in business
... steel to aluminium or plastic etc.

Increasing responsibility for supply chain management
... point of sale on track or after build rather than upon receipt

Leaner organizations
... multi-skilled staff operating 24 hours per day

Environmental and legislative demands
... emission of vehicles and plant, airbags etc.

The international nature of the automotive industry makes these challenges global concerns with regional bias. The industry unification gives excellent opportunities for the marketing of IT solutions that are seen as a prime facilitator to solving these problems.