|
In the movie "Casablanca," after Humphry Bogart
shoots the villain, the friendly police chief (played by Claude
Rains) covers up for him by telling his underlings, "Don't
just stand there! Round up the usual suspects . . . . " This
past week, another major car company revealed that it is several
billion dollars in the hole, and then, lest anyone think they
were taking this situation lying down, they hastened to identify
a group of "usual suspects" they felt could be counted upon
to take the fall.
The company, of course, is DaimlerChrysler,
which announced it will have to take a $3.9 billion restructuring
charge in 2001 in order to cope with losses at Chrysler that
are expected to reach $2.25 billion this year. The "usual
suspects" are their suppliers: the company's stated goal is
reduction in material costs by more than five percent in 2001,
and a full 15% reduction in material costs by the end of 2003.
Does this sound familiar? Another car company
turning to its suppliers for across-the-board price reductions?
Its beginning to seem like the only principle guiding the
automakers is "When in doubt, go for 5-5-5."
Don't get us wrong: we at CastingTrade don't
think there's anything wrong with trying to improve costs
-- that's just a normal part of good procurement, together
with improving quality and improving service. But something
IS wrong when these improvements are demanded in a reactive
way, out of a dire need to bail out the customer for problems
not necessarily related to the procurement at hand.
Every supplier has been in the position where
a customer has gotten himself into a jam, and then hit the
supplier with the proposition, "If you don't bail me out,
I might go out of business [or some lesser disaster], and
THEN where will YOU be?" The responses usually fall into three
categories. Many, if not most, suppliers grudgingly accept
the need to eat their customer's problem, and console themselves
with the thought that it's just "the price of doing business."
A small number, on the other hand, seize the opportunity to
stick it to the customer -- though THEY usually don't remain
suppliers for very long! Finally, there are a few -- definitely
a minority -- who go along with the burden-sharing, while
also learning a lesson and moving immediately to extract themselves,
across the board, from relationships with this kind of customer.
The suppliers in this last group may actually end up with
stronger businesses as the result of the experience.
Everyone ends up being one of the "usual suspects"
sooner or later. The question is whether you line up with
the eaters, the stickers, or the learners.
View index
of other archived CastingLink editorials.
Subscribe to the free weekly
CastingLink e-newsletter.
|
