In July 2003, Renault awarded the paint process division of Swiss tooling supplier ABB “Optima” status, making it one of 53 preferred supplier companies. ABB’s body-in-white business first won Optima status in 2000.
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Renault established Optima in 1998 to give secure contracts to favoured suppliers over at least one seven-year model cycle. If Renault was satisfied with a supplier’s performance on one model, that supplier would be preferentially re-selected for the next generation.
In return those suppliers offered guaranteed levels of “cost, quality and performance, as well as priority access to innovations,” according to Renault’s social performance report in 2002. In 2001, Renault believed it would have around 100 Optima suppliers within three years.
But less then a year after ABB’s second nomination for Optima status, Renault has quietly dropped the programme, which ran for a little less than six years. The joint Renault-Nissan Purchasing Organisation (RNPO) is currently working on a system of preferred suppliers that will replace Renault’s Optima program.
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By GlobalDataReflecting the changing requirements of an OEM group with volume manufacturing operations on three continents, Renault-Nissan, through RNPO, has a requirement for suppliers with the capabilities to develop and supply common components and systems on a global platform basis, with reduced unit prices. In 2003, RNPO bought €33 billion of components in total, and says that Renault and Nissan shared around 35% of their suppliers.
“We are in a transition phase,” said Pierre-Alain De Smedt, executive vice president, industry and technology for Renault, in an interview with SupplierBusiness.com at the Salon Internacional del Automovil de Madrid. “We want to harmonise with Nissan.”
RNPO provides both partners full access to the range of resources within each company, “not only for common technical specifications, but also for the choice of suppliers. RNPO gives Renault and Nissan… opportunities for shared sourcing in all parts of the world,” says Odile Desforges, the CEO of the organisation. But Desforges and her deputy, Hiroto Saikawa from Nissan, are also charged with ensuring that “the direction taken at RNPO… keeps to quality and price criteria set by Renault and Nissan.”
Need to integrate global partners
Renault’s 558 component supplier companies made up just 6.5% by number of all the carmaker’s suppliers, but accounted for over 65% of procurement spending in 2003.
To exploit the greater opportunities available through access to both Renault and Nissan programmes, suppliers must operate globally to support both customers across their manufacturing footprint.
“We will proceed with a system that corresponds to the cultural effects and the effect of changes in dimension to a global alliance. It will also reflect a platform of Japanese suppliers and a platform of western suppliers. This supplier base [will be] piloted by RNPO,” said Michel Faivre-Duboz, Renault’s director of passenger car engineering.
RNPO will also have to decide how to incorporate strategic suppliers who are not already on the list. Although Nissan has largely dissolved keiretsu ties with suppliers in Japan, Calsonic Kansei is a worldwide partner to Nissan for cooling, exhaust and cockpit systems. Visteon is a major supplier to North American truck models off the WZW platform (Nissan Titan, Infiniti QX56, Nissan Armada), which are fitted with cockpit and front-end modules from the Lextron-Visteon joint venture. And TRW Automotive supplies the electric steering systems on Alliance B segment vehicles, such as the Nissan March/Micra and Renault Modus. None of this trio was an Optima supplier.
Ultimately, a realignment of alliance purchasing may not unduly concern Optima suppliers though the drive for global sourcing solutions may upset the strong European bias of the existing list.
Even before Optima was dissolved, 90% of the supply base had no privileged access to Renault. For suppliers with significant commodity business with Renault, the introduction to a global marketplace will probably make life harder.
“The need to be a worldwide supplier with a Japanese partner” in order to grow business with the alliance was a key issue raised in a 2003 SupplierBusiness.com survey of Renault-Nissan suppliers.
SupplierBusiness.com
