Supplier Development Process; Bahia-Brazil

The Brazil automotive industry is projected to reach 2.4 million units in 2007. I recent years some of the industry migrated to non traditional regions for productivity gains. With the OEMs geographical move, traditional Tier 1 suppliers followed OEMs to new locations, on the basis of a better result (Quality, Cost and Timing (delivery). Tier 1 suppliers relying on bringing parts and components from distant locations, may generate a difficult cost/logistics/results balance, and do not optimize quality levels and business results. This paper unveils a 2006 - 2009 initiative in Bahia. The State Government and the Federation of Industries joined efforts to install competitive Tier 2+ suppliers in the northeast of Brazil, with the support of the German Government agency GTZ to provide the proper technology.

A multidisciplinary team has been empowered to determine the value chain demand, analyzing possible offering, appointing technology partners and developing detailed business cases to establish an extended value chain in Bahia. The process described in this paper to optimize a value chain is applicable to any industrial initiatives seeking improvements to QCT, better financial results, and enhanced sustainability with social responsibility and environmental stewardship.