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Suppliers Rate Honda “Most Preferred” Customer

--New OEM-Supplier Relations Study Shows Honda in 2^nd Place among Six Largest Automakers--

MAY 13 - Honda’s efforts to improve its supplier relations are paying off as the company is ranked 2^nd in the 2014 Annual Automotive OEM-Supplier Relations Study.  Honda has also been named “most preferred” customer” among the six OEMs*.  These results point to a reversal of the trend of the last few years.

In terms of its Working Relations Index, the study indicates that Honda’s increased score was due primarily to improvement in three key areas: supplier relationship, supplier communications and supplier profit opportunity. 

In relation to Foundational Business Areas, Honda is top-rated in paying invoices on time and according to terms, as well as in resolving invoice payment issues.  Honda tied with Toyota—the holder of the top spot in the annual study—in allowing suppliers to recover material cost increases and in the confidential treatment of proprietary information and intellectual property. 

One foundational area that was heavily focused on this year was the role of the OEM’s vice president of purchasing and buyers in building more trusting supplier relations.  The study reported: “Of the Big Six automakers Honda’s and Toyota’s VP and buyers are rated number one and two, respectively, in working to build more trusting supplier relations, and their buyers are being the most transparent among the OEMs in providing suppliers information.  At both companies, the VPs and buyers are the most highly rated of the OEMs.” 

In assessing the outcome of the study, Honda North America’s Vice President of Purchasing and Cost Strategy Tom Lake said: “Our team has made a concerted effort to continuously improve supply chain efficiency and the way we collaborate with suppliers. However, these efforts mean far more to us when the suppliers themselves acknowledge seeing a positive impact."

Lake was also especially proud of Honda being recognized as “most preferred.” He said: "Being recognized by our suppliers as their ‘most preferred’ customer is a credit to each associate who interfaces with suppliers or impacts our supply chain efficiency in any way.”

The annual study, now in its 14^th year, focuses primarily on Chrysler, Ford, Nissan, Toyota, General Motors and Honda, because these six automakers comprise 86 percent of light vehicle sales in the U.S. 

*Original Equipment Manufacturers

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