Suppliers, automakers tackle new crises together

Automakers and suppliers are attempting to help each other navigate the stress and strains in their operations caused by ... you name it — the pandemic, the disruption of electrification, the supply chain complications of trade friction.

The COVID-19 crisis demonstrates the need for communicative relationships between automakers and their parts makers, said Shilpan Amin, vice president of global purchasing and supply chain at General Motors, in a Zoom presentation Tuesday during the Center for Automotive Research Management Briefing Seminars.

"When you talk about supplier relations and building that trust and collaboration, it's been key for us to move forward," Amin said. "Even when we started having the impact, especially here in the U.S. and the stay-at-home orders came in place, it was incredible to watch our industry come together and talk about what it takes to restart."

Amin called out two notable examples of supplier-automaker collaboration.

Suppliers shared return-to-work playbooks with their own supply chains, a move sparked primarily by Lear Corp.'s public release of its own restart plan. And the industry collaborated to provide for critical care needs through ventilator and face shield production.

"You saw elements of removing the competitiveness and putting the collaboration back in," the GM executive said.

Katherine Worthern, vice president of supply chain management purchasing at Yazaki Corp., said the coronavirus crisis required her to reexamine business operations and business continuity in a way that previous crises had not.

"Our dialogue with our supply base has been very strong," Worthern said. "As a supplier, we want to provide confidence to our customers but also manage our supply base.

"From a standpoint of working through this time of crisis, it's really important to have these strong relationships and ensure we are quick to react to alternatives — and really, having that all-in discussion," she said.

Neither Amin nor Worthern saw competitiveness arise out of the current crisis, they said.

"The power of teamwork and the ability to demonstrate the potential of an organization comes out because people find creative solutions," Amin said.

Amin said he does not expect to make any major changes to his approach to the supply chain as a result of trade tensions and other parts of the business being hit by existing challenges.

"At this time, there isn't anything different that we would need to do, given the current state of the business," he said.

However, some changes moving forward could include identifying inefficiencies, becoming leaner and engaging in more proactive monitoring of the supply base.

"I think we'll have a different business model going forward," Worthern said. "We'll be more lean coming out of this.

"We identified a lot of complexities, and we're working with our supply base to reduce that complexity, and we have proposals that we'd like to get in front of our customers," she said.

Ultimately, the necessity of being proactive is critical, Amin said.

"We never let a crisis go by without the opportunity to improve the business and find the path to more efficiency," Amin said. "To be able to move forward, we've got to rebuild everyone's liquidity and rebuild those balance sheets."