Brose says the countries making up the Visegrad 4 group, namely, Slovakia, Hungary, Czech Republic and Poland, are now starting to emerge as innovation hubs rather than purely manufacturing environments.
A plethora of suppliers and OEMs have beaten a well-trodden path east of the Oder River for some time now as a combination of competitive wage costs and an educated workforce have made the region attractive, with Brose outlining some of its supplier selection criteria.
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“This region is not [just] about manufacturing any more, it is about innovation as well,” said Brose purchasing director, Eastern Europe, Michal Stefek at the recent Central & Eastern European Automotive Forum organised by Adam Smith Conferences in Budapest.
“How do we find suppliers at Brose? The headline is reliable suppliers. When we look for a supplier, we are not ready to discuss compromises in quality – flexibility and speed are key. Then comes a more soft area: proactivity, honesty, stability, integrity, loyalty to customers and values. If everything is OK in this area, then we are in the trust zone.
“How to keep running for the long term? Self-improvement, supply chain focus and innovation mindset. Obviously not everything is perfect – in some cases we have to say goodbye. We decided to develop a new plant in Serbia and we decided to enlarge our supplier base in this region.
“We found 250 new suppliers – 17 made it to the stage of first visit and [now] seven are scheduled to be audited. Before you even start searching, you need to know what you are searching for. It is also good not to introduce too many suppliers. Only 3% of our supplier names made it to audit, but that was expected because the criteria in the automotive industry are very tough.
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By GlobalData“Don’t look for a perfect supplier – there is not a perfect supplier. There will be moments, there will be failures, deadlines not met. In the end, it is also about human to human behaviour – it is about handshakes. It is people who make business.”
Brose’s presence in Serbia reflects growing interest in electromobility in South East Europe, while its low labour costs and rising potential of university graduates is attracting more and more suppliers.
The Brose purchasing director also reflected what others were noting during the Central and Eastern European Forum, namely the region was gradually seeing a return of some of its former population, which had moved to the West for labour opportunities.
“It [South East Europe] is the most dynamic market at the moment,” added Stefek. “Young people, when they gain experience in Western Europe or wherever, they will start coming back.”
