FCA has announced that it will no longer hold its purchasing staff to individual cost-saving goals when dealing with suppliers.
The original goals had handcuffed staffers when suppliers have sought pricing relief. FCA is notoriously hard on its suppliers, which may or may not be factored into recent quality SNAFU's from Auburn Hills.
FCA said the buyers will not work in teams who will work cooperatively to meet company goals. It's expected that buyers will begin selecting higher quality components as it seems compensation won't be tied exclusively to savings.
Tom Finelli, FCA's VP for Purchasing and Supplier Quality said “This sort of hit us across the face a few weeks ago, we realized that our relations with suppliers were positive at the leadership level, but were struggling at the buyer level.”
This marks a fundamental shift in FCA's purchasing methodology. Previously cost was the main hurdle for suppliers to keep themselves in consideration, now they will focus on component quality as a consumer would.
FCA is in dire need of shoring up their supplier relations, Planning Perspectives Inc. have noted that FCA is slow to make payments and unwilling to help suppliers cut costs. The changes will take effect in early 2016.