Peter Ellis
Assistant Plant Manager, Delphi Corporation

GM produces 13.4 million vehicles annually. Last year the company purchased $129 billion in direct and indirect material. Seventy-six percent of GM’s suppliers are in North America, providing 98% of the material GM uses.

The automotive industry is very competitive, with demands for price cuts at new highs. In response, purchasing at GM is rapidly moving from a regional to a global focus – moving away from non-aggressive sourcing to sourcing in low-cost countries. This is key for North American manufacturers, as they have a long way to go to remain competitive in the long run.

It is recognized that if GM is to survive, it needs to be profitable – and so does its supplier base. This must be worked on jointly. An increasingly important strategic initiative for GM is broadening the knowledge on constraints management to its business partners through education and joint initiatives.

GM is now using TOC in manufacturing systems design. The company is working with suppliers as soon as contracts are awarded – several years before production begins - to determine how the system is going to run.

A key supplier working closely with GM is its former subsidiary, Delphi Corporation, the largest auto parts supplier in the world. Delphi has 179 manufacturing locations, employing 192,000 people. It has $29 billion in annual sales, of which $15 billion are to GM.

The arguments between GM and Delphi usually occur over cost rather than delivery or quality. The relationship between GM and Delphi has at times been challenging. The presenters have always been able to work successfully, though, because they always stayed focused on what is important – the bottom line.