2011 Industry in Transition: The Dynamics of Supplier-Customer Power
Section 1 – Your View of the Evolving Landscape
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Welcome and Thank you!


This first section of the survey consists of 12 questions that pertain to the experience of your company in general. Your answers will help to develop a sense of how suppliers have fared since the economic recovery began. The second section of the survey will ask you to tell us about the nature of your interaction with individual customers.

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2. What category most closely defines your primary product area?
Interior
Body Exterior
Powertrain
Electrical/Electronics
Suspension
Other (please describe)
3. How would you characterize your company’s current financial position compared to last year? (pick the answer that best applies)
Stronger
Moderately weaker
Significantly weaker
At risk of Chapter 7 or 11
Other (please describe)
4. What is your biggest financial and / or operational concern for your company over the next 12 months?
5. Have you continued to reduce your cost structure since 2009-2010? If so, by how much?
Less than 10%
10-20%
20-30%
30+%
Have not made further cost reductions
6. How much of the cost structure improvements made during 2009-2010 have you been able to retain?
1-15%
16-25%
26-50%
51-75%
Over 75%
7. In what areas did you add back resources / costs and why?
8. What is the primary material your company uses in its parts manufacturing (by volume)?
Steel
Aluminum
Plastics/Composites
Rubber
Other (please describe)
9. What is your company’s current breakeven point as measured in North American light vehicle production?
8 million units 8.5
9 9.5
10 10.5
11 11.5
12 12.5
13 13.5
14 >14 million units
10a. How much new business opportunity (e.g. level of quoted programs) has your company experienced so far in 2011 vs. 2010?
1-15% more
16-25% more
26-50% more
50+%
Less than in 2010
10b. How much of this new business do you anticipate winning?
1-15%
16-25%
26-50%
More than 50%
10c. How would you compare the profitability of this new business to that of current programs?
Significantly less profitable
Somewhat less profitable
About the same
Somewhat more profitable
Significantly more profitable
11. Compared to last year, do you feel the power of your company relative to that of your CUSTOMERS has:
Increased
Stayed the Same
Decreased
12. Compared to last year, do you feel the power of your company relative to that of your SUPPLY BASE has:
Increased
Stayed the Same
Decreased
13a. Which customer do these responses pertain to?
BMW Honda
Chrysler Hyundai/Kia
Daimler Nissan
Ford Toyota
GM Tier One
13b. Is your company considered a preferred or strategic supplier to this customer (e.g. included in a formal list of preferred suppliers)?
Yes
No
14. What % of your total business is with this customer?
1-15%
16-25%
26-50%
51-75%
Over 75%
15. In a typical example, how much of a price reduction on EXISTING business has this customer asked for, or stated an expectation of, in the past year, over and above what was previously agreed to? (specify % or dollar amount asked)
Year 1  
Year 2  
Year 3  
Year 4  
Year 5  
16. How much, if any, did you agree to? (specify for each year)
Year 1  
Year 2  
Year 3  
Year 4  
Year 5  
17. Were there any background circumstances or history that would be relevant for us to know in order to better understand the situation?
18a. Did the customer offer assistance in driving out cost rather than leaving it entirely up to you?
Yes
No
18b. If yes, how did the customer help?
19a. What was the IMMEDIATE result based on your response to the request?
Gained more business
Maintained same level of business
Lost business
19b. What FUTURE result do you anticipate based on your response to the request?
Gain more business
Maintain same level of business
Lose business
Unknown
20a. Have you been successful in obtaining any price INCREASES from this customer on existing business, outside of any raw material-related adjustments?
Yes  No

20b. If yes, how much (in percentage terms), and what arguments did you use to obtain it?
21a. Has this customer asked for money upfront for anticipated productivity gains vs. an annual price reduction in the last year?
Yes  No

21b. If yes, please describe.
22a. On NEW programs that you have won from this customer in the past 12 months, have you been asked for an LTA (long-term agreement)?
Yes
No
N/A - Have not won new programs

22b. If an LTA was used, did it include price reductions over the term of the agreement?
No
Yes - If so, how much?
Year 1  
Year 2  
Year 3  
22c. If an LTA was used, how long is your company’s supply obligation to the customer?
One Year (whether it’s calendar or model year)
More than One Year, But Less than Three Years
More than Three Years, But Less than Life of Program
Life of Program

22d. How significant have your negotiations been over the intellectual property clauses of your agreement?
Major discussions held on IP clauses
Some discussion
Minimal issues with IP

22e. Were you able to come to a successful conclusion over IP issues?
Yes
No
Not yet known
Not applicable
Comments:
23. Has this customer been introducing new contract provisions in the following areas and if so, do you feel these provisions are reasonable?
Material cost indexing Yes No
If yes, reasonable? Yes No

Volume-dependent pricing Yes No
If yes, reasonable? Yes No

Other:
24. Have you been asked to assume greater potential liability or a larger share of costs in any of these areas?
Warranty cost sharing (for repair/replacement of parts) Yes No
Product liability (e.g. in the event of lawsuits) Yes No
Logistics costs Yes No

Other:
25. How have you received funding for future new products in the following areas?

Engineering Upfront Partial Piece price Other
Tooling Upfront Partial Piece price Other
Capital Upfront Partial Piece price Other
26. Have you observed any instances of this customer changing its role in the following areas?

Design & development? Greater role Lesser role No change
Parts manufacturing? Greater role Lesser role No change
Designating tooling sources? Greater role Lesser role No change
Designating sub-suppliers? Greater role Lesser role No change
Comments:
27a. How much opportunity has your company had to quote takeover work for this customer in the past 12 months?
More than 25 quotes for takeover business
10-24 quotes
Fewer than 10 quotes
None

27b. What was the impact on your business? (check all that apply)
Clearly became the lead player
Reduced or eliminated at least one competitor
Gained business with a new customer
Improved profitability
Other
28. Has the number of competitors bidding on business with this customer changed in the past 12 months?
Increased
Decreased
No change
Unknown
29. Have you experienced increasing competition from OFFSHORE competitors recently with this customer?
Yes
No
Unknown

If yes, from where? (specify country/countries)
Eastern Europe
Asia
South America
Other
30. Please provide contact information so that we can email you a copy of the summary of results.

  Name: 
  Company: 
  Phone: 
  Email: 

We ask that your company complete the second section of the survey for each major customer, so please return to the beginning of Section 2 to answer with a different customer in mind.

Final Comments: