Why do companies ask suppliers what their Strategic Business matters are?

[Marc]

Subject: Suppliers' business
Date: Mon, 18 Oct 1999 19:07:45 -0600
From: "Cliente 05"
To: cheech

Hi Mark,

I'm trying to sail in these "quality" seas and I like to know: Why do Automotive Companies ask suppliers what their strategic bussiness matters are? (Based on QS-9000 and/or VDA6.1)

Muchas gracias (Thank you very much).

Pablo Walle
Monterrey,Mexico

[Howard Atkins]

They do not want to see the actual results but to know that the suppliers have an ability to analyse their business and plan for the future.
The demand is reasonable if you want to build up a supplier base that you can work with.
The actual contents are not auditable.

[Marc]

When the business plan thing started out a lot of companies were miffed. In 1996 I was at a conference in Detroit where Reid was talking and said that eventually their intent was that the business plan would be auditable. He also said QS9000 would eclipse ISO9000 and make it practically useless. Things haven't evolved as he predicted, and undoubtedly originally intended. As we all know, Reid has left GM and is now with KPMG I believe.

[Kevin Mader]

Marc,

Making it auditable would make sense in regard it would protect the Customer from entering into a bad partnership (a better sense of 'if an organization will be here tomorrow). Still, a ton of privacy issues. I imagine this would drive off many organizations that are pursuing this type of business today. How much does the Customer need to know about your business? Are you allowed any secrets?

Regards,

Kevin

[Marc]

Well, my personal position is that "You asked for it!" if you decide to sell to automotive. Most companies don't want their business plans 'shared'. Specifically what would they audit it for?

I don't know. It seems to me if they want to go that far they should just go ahead and buy out the company.

Not to mention - what would come next?

[Kevin Mader]

It is a strange requirement in that as Howard points out, it is not auditable. Registrars give cursory glances a materials put before them. I wonder if you gave them a recipe book with a book cover with "Strategic Business Planning for Company XYZ" would they be satisfied? I know that is a bit of a reach (and not integritous), but the reviews I have been subject to really don't go beyond the Table of Contents. My point being is that this requirement can be easily satisfied with the wrong evidence.

It is important, however, to establish with your Customers that you are not a run of the mill supplier using adhoc judgement to stay in business. The Customer is trying to build a partnership, longer term at that. Organizations looking to the future are at the very least, looking in the right direction. Formalizing this does not gaurantee success. It ensures nothing. It provides an organization with a potential blue print to be successful, a reference document when people begin to forget what they said or what direction they are heading. This is sort of like the Quality Policy hanging on a wall, on the back of a business card, or laminated handout. By itself it is nothing. What it stands for may be everything.

I do not know if there has ever been a correlation study done to determine if a strong relationship exist between formalized strategic plans and organizational success, but I will comply with the requirement until someone can show me the reverse correlation is true.

Back to the group...

Kevin

[Marc]

Has companies (like Ford and GM, but others as well - Let's not limit this to automotive) asking suppliers what their strategic bussiness matters are been an issue for anyone here as of late?