Chrysler's Campi (new purchasing boss) will move fast to buy global.

Stijloor

Staff member
Super Moderator
#1
Friends,

Here is an article from "Automotive News."

What do my Fellow (automotive) Covers think?

This is an interesting article in light of what Chrysler is demanding from their American suppliers. I wonder if this will be true for the overseas suppliers....

Especially, read the last part of this article: "Mending Fences"........

Stijloor.

_________________________________________________________________


Chrysler's Campi will move fast to buy global.

Bradford Wernle and David Barkholz
Automotive News January 21, 2008 - 12:01 am ET

DETROIT — Chrysler's straight-talking new purchasing boss says he will buy a whole lot more parts in low-cost countries like China and India — and he won't waste any time getting started.

John Campi, who took command of the company's $40 billion parts budget this month, also wants to shift more design and information technology work to India.

Campi says he can't believe Chrysler — which buys virtually all of its parts in North America — hasn't gone more to low-cost countries.

"I am amazed at what we are not doing," he said in an interview at the Detroit auto show. "I'm surprised and somewhat appalled that we don't have a more balanced footprint with our supply base."

Effort was botched.

In fact, Chrysler has tried. But Campi says the company's attempt to buy more parts overseas — Project Magellan, which was started a year ago — was a disaster and was scrapped.

Blunt talk is typical of the 63-year-old Campi, who has hit Chrysler like a whirlwind. He arrived as an adviser to purchasing chief Simon Boag in October. On Jan. 3 he replaced Boag, who had been in the job for only seven months.

With a dry wit and no-nonsense manner, Campi minces no words when discussing his first impressions of Chrysler. For instance, he says Project Magellan "damaged Chrysler's reputation unnecessarily."

And as one of CEO Bob Nardelli's handpicked lieutenants, Campi clearly has the green light to take decisive action.

Long history with Nardelli.

Campi, a well-traveled purchasing exec, was procurement chief at Home Depot under Nardelli until early last year. He concedes that the giant retailer has little relevance to Chrysler but says he picked up lots of applicable experience under Nardelli in the 1990s at General Electric's Power Systems unit.

He also was global sourcing and logistics chief at DuPont and a consultant with PricewaterhouseCoopers doing work for General Motors in 1989.

Campi has a sizable reputation in the world of supply chain management professionals. And a big part of that reputation is his willingness to go global.

Chrysler buys nearly all its parts from North American factories. That's about to change. Campi says he must use the best suppliers wherever they are found — and that could spell trouble for some suppliers that have no factories in low-cost countries.

Magellan's shipwreck.

Last year, before Campi got his current assignment this month, Chrysler killed Project Magellan, which was launched by former Chrysler purchasing head Peter Rosenfeld. Rosenfeld was replaced last May by Boag.

Magellan was supposed to generate $6 billion worth of purchases annually from China and other low-cost regions. It didn't happen.

Campi says the program failed because Chrysler relied on a consultant to request bids on the Internet rather than develop face-to-face relationships with potential vendors. Although Campi declined to name the consulting firm that administered Magellan, Automotive News confirmed independently that it was Accenture Ltd.'s global automotive practice.

Accenture referred questions to Chrysler.

Said Campi: "When you blanket suppliers in a country like China by e-mail, and you are not doing it face to face and demonstrating your sincerity, they say, 'I don't want to deal with them.' "

So Chrysler is getting almost none of the nearly $7 billion worth of Chinese auto parts flowing into North America each year, Campi says.

Chrysler knows which Chinese companies are exporting those parts and which automakers are buying them. Campi hopes to let some of those suppliers have a share of his parts contracts.

Campi says Chrysler must do a better job buying components from current North American suppliers that have factories overseas: "Some have set up operations (overseas), and we simply haven't taken advantage of it."

To make this happen, Chrysler will increase staff at its existing overseas engineering centers. It may open some new centers, too, but Campi did not indicate possible locations.

Mending fences.

Campi says he aims to improve relations with existing suppliers.

"My suppliers are not my enemies. My suppliers are my partners," he said. "A lot of the costs our suppliers are incurring is because of how I am doing business. I need to understand how I am driving costs up. There are many things we do today that have to change."

One problem, he said, is "late engineering-change notices that come through almost at random." He added: "We need to control the process better and we've already started some movement in that direction."

Campi says Detroit's automakers must revamp their supply chain management.

"There has been a very contentious relationship specifically in Detroit ... not a collaborative one," he said. "I don't know if the U.S auto industry can survive unless we get a better approach."
 
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Jim Wynne

Staff member
Admin
#2
Re: Chrysler's Campi will move fast to buy global

I found this bit interesting:
Chrysler buys nearly all its parts from North American factories. That's about to change. Campi says he must use the best suppliers wherever they are found — and that could spell trouble for some suppliers that have no factories in low-cost countries.
There seems to be a little cognitive dissonance going on here. Does "best" mean "cheapest"?

There is some evidence that Campi understands the problem, though:
Campi says he aims to improve relations with existing suppliers.

"My suppliers are not my enemies. My suppliers are my partners," he said. "A lot of the costs our suppliers are incurring is because of how I am doing business. I need to understand how I am driving costs up. There are many things we do today that have to change."
He thinks he knows one source of trouble:

One problem, he said, is "late engineering-change notices that come through almost at random." He added: "We need to control the process better and we've already started some movement in that direction."
It remains to be seen how much influence an allegedly enlightened purchasing chief can have on a badly broken engineering system. I would much rather hear the VP of Engineering telling us about engineering problems.

Campi says Detroit's automakers must revamp their supply chain management.
In other news, Dog Bites Man.

"There has been a very contentious relationship specifically in Detroit ... not a collaborative one," he said. "I don't know if the U.S auto industry can survive unless we get a better approach."
I think it's probably too late. Everyone's been telling Detroit since at least the 1980s that they need to change their supplier management "strategies."
 
R

ralphsulser

#3
Re: Chrysler's Campi will move fast to buy global

I wonder if all the new Chinese suppliers of cheaper parts will comply with
TS16949 and Chrysler Customer Speifics, or will they get a waiver.
I know there are some really good suppliers there that have been established for some time.
India has some very good suppliers that are proactive and implenmented TS16949 before a lot of US companies.
 

Stijloor

Staff member
Super Moderator
#4
Re: Chrysler's Campi will move fast to buy global

Chrysler will not be able to "requirementize" and "outsource" themselves back to prosperity. Unless they are willing to take a real hard look at their current way of running their business including (as Jim Wynne already mentioned) their engineering practices. Purchasing guys were never able to save a company from destruction; immediate "cost savings" will only go so far.

Aside from that, the money guys owning Chrysler, will eventually run out of patience.

Stijloor.
 
Q

qualityboi

#5
Re: Chrysler's Campi will move fast to buy global

It sickens me that we have to follow standards that folks like these made...so they can blame their poor business judgement on suppliers!
 

Stijloor

Staff member
Super Moderator
#6
Re: Chrysler's Campi will move fast to buy global

It sickens me that we have to follow standards that folks like these made...so they can blame their poor business judgement on suppliers!
You bring up an interesting point. But keep in mind that there were many instances where the suppliers dropped the ball too!

Stijloor.
 

Wes Bucey

Prophet of Profit
#7
Re: Chrysler's Campi will move fast to buy global

Just explain HOW he will control a supply chain that will lie about materials used in making components? I don't see much difference between pet food makers, children's toy makers, and automotive parts suppliers. When the OEM starts squeezing the price (like a dope dealer raising the price once the addict is hooked), what will that parts maker do to keep getting his "fix" from the OEM dope dealer?

Today, I had another example of a supplier "substituting" a cheaper component in a "hidden" part of a product. The supplier (or assembler) substituted a carbon steel fastener on an otherwise all stainless steel product where the fastener was hidden by a rubber pad and could not be detected without destroying the product. Also, the supplier/assembler did not use a waterproof glue on a pad meant to go though routine washing. After three or four washings the pad came off and the rusted carbon steel fastener was exposed. Off hand, I would estimate the total savings could not have been two cents on a item retailing for $5.00. Frankly, until the hidden substitutions became apparent, I was impressed with the design and workmanship of the product (the visible part, anyway.) Unfortunately for the OEM who brought the product to my retail counter, I will never buy his products again and, since it was only a $5.00 item, I won't make the effort to write him and tell him how his offshore supplier destroyed me as a repeat customer. Do we give a pass to an OEM who is defrauded by a supplier? or do we hold him responsible for everything in his supply chain? I choose to hold him responsible for everything.
 

Jim Wynne

Staff member
Admin
#8
Re: Chrysler's Campi will move fast to buy global

Do we give a pass to an OEM who is defrauded by a supplier? or do we hold him responsible for everything in his supply chain? I choose to hold him responsible for everything.
I agree. Even in cases where there's ignorance involved, it's willful ignorance.
 
T

tyker

#9
Rather than being negative about this news, I wonder if the Cove could help Chrysler meet it's objectives.

I don't know how much the head of purchasing at Chrysler earns but, surely, with our network we could find someone in India willing to do the job for a lot less money.
 
V

Valeri

#10
Rather than being negative about this news, I wonder if the Cove could help Chrysler meet it's objectives.

I don't know how much the head of purchasing at Chrysler earns but, surely, with our network we could find someone in India willing to do the job for a lot less money.
Thanks Tyker - I needed that:lmao:
 
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