PSA/Peugeot-Citroen is joining Covisint to speed communications and the response time of Tier 2 and Tier 3 suppliers.
'We have to make sure that Tier 2 and Tier 3 suppliers are connected one way or another to the supply chain,' said Herve Guyot, head of purchasing at PSA. 'Those who must invest in new machines to make parts for us need to be informed of our needs as soon as possible.'
Too often, 'Tier 1 suppliers don't always forward to their suppliers the information PSA gives them, or they don't do it fast enough,' Guyot said.
PSA has been plagued by supply-chain shortages for its new Peugeot 307 built at the Sochaux and Mulhouse plants in France. Customers who want a 307 with leather seats or aluminum wheels must wait three months instead of the typical six weeks for other 307s.
An information bottleneck can cost precious time. Smaller suppliers may need 12 months to get new tooling. Guyot is confident Covisint will help overcome this barrier.
Improved communication between carmakers and lower-tier suppliers can play both ways: One Tier 2 supplier executive said he had failed repeatedly to persuade his Tier 1 client to adopt a new, more efficient process.
'We went straight to Renault, and they persuaded the supplier to adopt our suggestions,' the supplier said.
When PSA agreed to join the auto industry's online exchange last month, it became the sixth automotive member. General Motors, Ford and DaimlerChrysler founded Covisint. PSA rival Renault and its affiliate Nissan came on board later.
PSA will use Covisint reverse auctions to save time and cut purchasing costs, but Guyot plays down the effect on suppliers. 'We make 150,000 small purchases a year,' he said. 'With those new tools, we could save an enormous amount of time.'
PSA's 1,000-person purchasing division bought E25.6 billion in goods last year.