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Improve supply chain collaboration with the Working Relations Index®

March 2, 2023 Article 5 min read
Dave Andrea
OEM-supplier relations are complex and dynamic, directly influencing product development, cost competitiveness, quality, and more. Here’s how the Plante Moran Working Relations Index® (WRI) study can help improve customer/supplier information flow, build business efficiency, and increase competitiveness.
View of people's hands and notes on conference room table.With suppliers contributing 60% or more of the value of today’s manufactured products, their customers are always thinking about the most efficient way to profitably leverage their suppliers’ input. Conversely, suppliers are committed to building stronger relationships and improving collaboration to drive long-lasting mutual benefits. However, the commercial leverage between the parties can at times restrict the honest flow of information necessary to help drive improvements. Plante Moran Working Relations Index® study bridge that gap to comprehensively improve understanding between customer and supplier. View insights from the 2023 WRI® Study here.

The North American OEM-Supplier Working Relations Index®

Each year, Plante Moran conducts its annual North American OEM-Supplier WRI® — an automotive-focused, public, syndicated study. The study collects confidential information from suppliers about what they believe restricts their ability to fully support new technology commercialization, new product launch readiness, and warranty reserve reduction. The resulting data is used by OEMs to improve the timeliness, cost, and quality of every interaction between them and their suppliers.

The WRI® methodology is based on three principles:

  • Anonymous responses by participants allow honest evaluation while respecting commercial and individual relationships.
  • Time-tested and academically rigorous questions quantify individual and corporate qualitative factors, creating a fact-based, data-rich index.
  • Consistency and relevancy enable year-to-year benchmarking as well as the adoption of new product and geographic markets over time.

Response rates are high for the automotive WRI® survey. For example, the 2022 syndicated study drew in more than 670 executives from more than 430 companies. This high response rate provides an accurate, unparalleled representation of the supply base’s opinion of the OEMs’ purchasing organizations. The breadth of the study means that results — both good and bad — are not “one-off” or unique to a particular company or personal relationship dynamics.

Benefits for suppliers

If you’re a supplier, participation provides you with an opportunity to provide input on buyers’ knowledge base, communication effectiveness, trust, responsiveness, and integrity without fear of retribution. Suppliers may also provide feedback on various policies and procedures driven by other customer business functions, such as contractual terms and conditions, payment timeliness, and warranty and other chargeback systems. 

If you’re a supplier, participation provides you with an opportunity to provide input on buyers’ knowledge base, communication effectiveness, trust, responsiveness, and integrity.

Your contribution through the WRI® study helps your customers recognize areas for improvement within their companies. If you receive a request to provide input, participation is strongly encouraged; your contribution will benefit you and your peers by assuring a robust data set that will be taken seriously by OEM leadership and the industry.

Benefits for OEMs

If you’re an OEM, the WRI® survey establishes the benchmark you need to determine if your supplier-related practices support — or detract from — your product development success, cost competitiveness, quality improvement, risk mitigation, and corporate sustainability. 

If you’re an OEM, the WRI® survey establishes the benchmark you need to determine if your supplier-related practices support — or detract from — your product development success.

The WRI® brings you honest input from your supply base about your buyers’ knowledge, communication effectiveness, response timeliness, and perceived integrity. It also quantifies your suppliers’ response to the business practices of your purchasing organization, such as contractual terms and conditions, payment timeliness, and warranty and other chargeback practices. 

OEMs use WRI® data to:

  • Set annual organizational or individual performance objectives. 
  • Track critical purchasing performance metrics. 
  • Establish action-oriented supplier council and workstream efforts. 

With industrywide data, you can measure your competitive differential created by supply chain capabilities. This data is critical, as many industries currently face supply chain capacity constraints and suppliers are gravitating to customers that are less costly to serve, as well as those that offer larger margins, even with equal or lower prices. In short, the WRI® creates an opportunity to help your company become your supply base’s customer of choice.

With industrywide data, you can measure your company’s supplier working relationship performance against your competitors.

Custom WRI® studies. Is one right for you?

Plante Moran also conducts custom proprietary studies for automotive OEMs and suppliers, as well as additional industrial sectors.

The use cases for custom surveys are diverse. For example, a foreign-based vehicle manufacturer looking to expand in North America needed to know if their supply base and supplier relationships would support the proposed localization and expansion. Plante Moran ran a baseline WRI® survey to determine the suppliers’ perception of the OEM and where improvement was needed.

In another example, an OEM had internal tension between its purchasing group and other functions. It wanted to resolve these issues based on data and not emotion. Plante Moran worked with purchasing and other functions to segment survey questions into categories of primary responsibility for purchasing, finance, engineering, manufacturing, and corporate leadership. After receiving ratings for the identified functions, the OEM was able to develop internal working groups — that included suppliers — to pinpoint the actions necessary to lessen friction between functions and the cost of doing business with that OEM.

Building a custom WRI® study is time- and cost-efficient. Setup requires an initial consultation, a confidential exchange of supplier contact information, and creation of an online survey to fit your needs and objectives.

The custom WRI® Voice of Customer survey for suppliers

Just as it’s valuable for a customer to know the honest opinions and perceptions of its supply base, some suppliers want to understand how their customers judge them on innovation, responsiveness, quality, and cost competitiveness.

Plante Moran conducts custom, proprietary surveys and interviews for suppliers from all industry sectors that go beyond typical quantitative “customer scorecards.” They provide a means to deeply understand the voice of purchasing, engineering, quality, and other major functions that determine sourcing decisions.

Suppliers use WRI® Voice of Customer analyses for:

  • Input into long-term strategic planning.
  • Allocating resources to grow strategic customer or business units.
  • Market and competitive intelligence, particularly in rapidly changing markets.

Custom surveys measure an individual supplier and its best-in-class competitor against quantitative-sourcing criteria. These results are complemented with personal interview workstreams that capture the customer’s qualitative opinions, providing a deeper level of analysis. The surveys and interviews can be conducted at various levels, including regional and global, corporate and business unit, and detailed functional levels.

Voice of Customer surveys include diverse inputs gathered over a short time frame. The analysis gives leadership concise, summarized feedback that would otherwise be shared across hundreds of separate conversations with different stakeholders. The insights are presented in a manner that supports actionable plans for long-term results.

The bottom line

As playwright George Bernard Shaw once said, “The single biggest problem in communication is the illusion that it has taken place.” Don’t let that happen to your customer and supplier relationships. A WRI® survey will improve your communication flow, build trust, and maximize efficiency — and your profits.

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