I have always wondered how typical Indian OEM-supplier relationships work. On a micro-level that is.
I wonder how the Managing Director of a multi-million dollar supplier group greets the General Manager – Sourcing of a leading OEM. The MD of the supplier probably smokes Havana cigars, goes around in a chauffeur driven S-Class and has the Ritz-Carlton as a second home. On the other hand, the GM – Sourcing earns a modest salary like any senior executive in an Indian automaker does.
And yet it is the OEM executive whose stamp of authority ensures 85% of the turnover of the supplier group. Yes, the Havana cigars are dependent on someone's signatures.
Does the high flying Managing Director (HFMD) greet the modest earnings OEM purchasing executive (MEPE) with reverence?
Up to the point of worship?
Do they meet like friends? Or is there some stiffness?
If they happen to meet somewhere outside India, would the HFMD ensure that the MEPE had an “enjoyable” stay?
If they happen to meet over drinks, who picks up the tab?
This thought process brings me to the second string.
Is OEM sourcing a completely transparent issue? Is there no underhand dealing involved in OEM sourcing? How easy, or how difficult, is it for a purchasing executive to favour a particular supplier.
I know that to a large extent purchasing is based on ratings, scores and systems. But there is always scope for an ambiguity where a supplier meets 85-95% of requirements. In such cases, the supplier is just about good enough on most counts but falls short on certain counts.
Does the supplier do a nudge-nudge wink-wink with the OEMs purchase personnel and get the contract?
Is people skills a factor in OEM-supplier relations? Should they be? Is playing golf with the Japanese OEM's MD part of business or just for pleasure?
I know that there was a controversy last year about Faurecia and some other suppliers bribing officials at VW, Skoda and SEAT to get lucrative supply contracts.
Does it happen in India?
I cannot help but wonder about how transparent things are in Indian OEM-Supplier relations. After all we Indians don't have an enviable track record in the area of ethics and corruption.
Assuming that the relationship has a certain degree of corruption involved is it more in case of companies like Maruti where even small components mean multi-million dollar businesses or in the case of a company like Ford where volumes are much lower. Are employees of a company which has conservative salaries more susceptible to corruption as compared to other companies where middle level managers are better paid? Think of it, automotive industry in India is one of the lowest rated in terms of take home salaries.
My personal experience is that OEMs, especially Indian ones, try to keep their supplier relations under wrap. A two wheeler OEM had blocked my entry into their offices once I became too nosey about their suppliers. The reason was clear – most of the suppliers were close relatives of the OEMs managing family and their were a number of cross-relationships involved which they did not want to talk about.
So how are Indian OEMs designing their supplier relations to ensure that they are completely transparent?
For more details on Purchase Department of OEM visit http://www.theautodiary.com
Integrated Commercial Colonies in Haryana
With the advancement of Science and Technology, the life style of public is changing rapidly. The more abrupt changes are being observed among urban population.
Principles for providing green areas in Urban Centres
The green areas are considered the lungs of urban centres. Such green areas in a city ensures freshness and improves the ambience of the town, maintain healthier environment by generating oxygen to the living creatures, and also function as an agent of recharging the ground with fresh rain water and controlling the increasing global warm.
Innovative Solutions for Urban Parking: The Rise of Multi-Level Parking Facilities
Urban areas are facing an escalating challenge with vehicle congestion and parking scarcity. As the number of vehicles surges, traditional roadways and parking solutions fall short, leading to parked cars cluttering streets, sidewalks, and green spaces. This not only causes traffic congestion but also wastes valuable time for commuters. To address this, cities must urgently consider constructing multi-level parking facilities. These structures can efficiently utilize limited urban space and reduce street-level parking pressure. However, funding constraints often hinder local authorities from implementing such projects. A viable solution is the adoption of the "Multi-Level Parking Module," which offers a strategic approach to developing parking infrastructure in densely populated areas.
