Chrysler turns to purchasing-again

By Douglas A. Smock -- Purchasing, 2/8/2001

The economic forecasts were as cool as the weather last month at the North American International Auto Show in Detroit. But this was a time to celebrate. The fruits of record-breaking years in auto sales were on display-a burst of creativity in new products and concept cars. Ford is giving rebirth to the T-Bird, GM is unveiling a luxury Cadillac truck and Chrysler is rolling out the Liberty.

A new midsize sport-utility vehicle, the Liberty was the opening act in Detroit's annual fashion show of metal and plastic. The master of ceremonies at the presentation was Thomas W. Sidlik, who runs the Jeep group and also serves as Chrysler's executive vice president of procurement and supply. If that last title sounds familiar, it's because it was previously held by Tom Stallkamp, who became president of Chrysler.

Stallkamp engineered the turnaround at Chrysler with the SCORE program that made suppliers real partners in design, manufacturing and profits. The profit picture recently, and suddenly, dimmed at Chrysler and the carmaker is once again turning to its purchasing pros for answers. The reason is simple, Sidlik said in an interview after his public duties ended at the auto show. Purchased goods and services represent 78% of costs at Chrysler.

Sidlik is beefing up SCORE , asking suppliers for immediate reductions in hard costs and for 10% savings through value-analysis projects. He and two other executives are supervising 20 Chrysler-supplier teams that are charged with bringing in the savings. Suppliers, Sidlik says, are anxious to participate in hopes of bigger future business. After all, that strategy worked to a T the first time. Inventory reductions, particularly at the new Liberty plant in Toledo, Ohio, are also part of the equation. (See page 30.)

It should be noted that there are two Americans on DaimlerChrysler's management board: Sidlik and Gary Valade, Chrysler's executive vice president of global procurement and supply.