Cross Industry Innovation: As the Auto Industry Moves from Steel and Glass to a Silicon-based Product, Supplier Relationships Take Center Stage

As the technical sophistication of the automobile reaches new heights, the automotive supply chain is mirroring the distributed model embraced by the high technology industry by relying more and more on key outsourced relationships. While this new business model offers great potential when it comes to optimizing cost, speed and quality goals, it also brings with it many challenges as companies struggle to manage and control swiftly growing and diverse networks of suppliers and business partners.

This paper first discusses the lessons the automotive industry can learn from high tech, underscoring the importance of “business relationship management.” The second half of the paper then demonstrates how one automotive company gleaned certain best practices from the technology industry, and implemented a collaborative strategy for building healthy and profitable relationships with a network of key suppliers.