The Group regards its suppliers as key stakeholders; as such constant engagement and communication are essential. Fiat Group continued to strengthen relationships with suppliers as demonstrated by the many long-lasting and mutually beneficial relationships, and confirmed by the minimal number of disputes in 2011.
Many activities are aimed at encouraging continuous dialogue with suppliers at all levels of management, including forums such as the Chrysler Group Advisory Council. These types of exchanges foster collaboration between the company and the supply base to improve partnership, initiatives, issues and opportunities.
In addition, the Group uses a dedicated supplier internet portal to share information on technical requirements, supply planning, supply quality and the results of compliance tests conducted on new components. From their side, suppliers can use the portal to communicate with the company, enter details of supply contract bids, specify the origin of components, update their contact details, etc. Chrysler Group redesigned its online portal in 2011 with input from its suppliers to streamline and enhance its value.
As in previous years, initiatives continued for exchanging ideas and information, including local conventions and Technology Days (25 meetings in 2011), attracting around 2,500 participants. At these events, leading suppliers in terms of innovation, technology and quality addressed specific topics and shared some of their latest technological developments.
At Chrysler Group, monthly Supplier Town Hall meetings, which are attended by an average of 400 suppliers either in person or via the web, continued to be a major enabler of two-way communication.
Also on the theme of continuous improvement, World Class Manufacturing Purchasing, in collaboration with the World Class Manufacturing (WCM) team organization, continued its work as a consultant to suppliers intending to implement the WCM system. During the year, WCM was implemented at additional supplier plants for a total number of 174 supplier sites now applying what is considered to be one of the world’s leading manufacturing standards. A total of seven Executive Conventions have been held with the purpose of examining the current state of program applications and driving senior management commitment.
At Chrysler Group, approximately 300 supplier plants have participated in specialized training programs with the goal of extending the basic principles of WCM throughout the supply chain.
Finally, the Group encourages supplier innovation through various initiatives. Supplier Performance (Su.Per) is a program aimed at encouraging a proactive approach from suppliers, by sharing with them the economic benefits generated through the introduction of innovative methods and technologies that they propose. In 2011, approximately 50 suppliers benefited from this program (30 in 2010). Of the numerous proposals received, around 220 have been implemented.
In May 2011, Chrysler Group launched the Supplier Innovation Gateway with the goal of stimulating innovative ideas that lead to benchmark systems. The gateway creates a streamlined process to review, investigate and approve supplier innovations.
To address existing or emerging sustainability issues, in 2011 Chrysler Group created the Supplier Sustainability Panel. This stakeholder group represents a cross section of the supplier base with participants from companies of different sizes, footprints and commodities. Topics addressed include ways in which the Group and its suppliers can work together on sustainability initiatives, gap assessment and resolution, as well as training and communication throughout the supply chain.
Dedicated email addresses (Fiat S.p.A.,Chrysler) represent another channel of communication through which the Group enables people to request information or report events or situations of non-compliance in the supply chain.
The global financial crisis made it necessary to increase monitoring and management of critical situations arising in the automotive supply chain. The Group has strengthened the teams and mechanisms used to manage supplier risk, in order to ensure prompt detection of high-risk situations and contribute to stabilizing them through the implementation of the most suitable measures. This may involve measures to ensure supply continuity, providing support for restructuring plans and, where necessary, temporary cash-flow support, also with the objective of saving jobs where possible. In some cases, such actions have been taken jointly with other automakers.
Several natural disasters impacted the automotive industry in 2011. In each event the Group has acted as a partner with its supply chain to contain and remedy supply constraints. For example, Fiat Group formed a task force following the Japan tsunami that resulted in risk mitigation strategies to significantly reduce the impact of component shortages. The task force structure and lessons learned were also deployed following regional flooding and the Thailand monsoons to mitigate risk to production operations across the Group.
