US automotive giant Chrysler is set to expand its use of no-bid contracts as it looks increase loyalty among key suppliers.
The new bidding process is being developed by Chrysler’s recently appointed purchasing chief, Scott Kunselman, and will see the company award contracts to suppliers on a no-bid basis but only in those areas that have more than one supplier. The benefits of such a system will mean that Chrysler will secure an uninterrupted flow of parts for its cars and improve relations with key suppliers. The suppliers themselves are expected to benefits from a more predictable revenue stream. According to reports, Chrysler has had 30 consecutive months of year-over-year sales and is planning to increase production by an added eight percent in 2013. Speaking to Crain’s Detroit Business Kunselman said: “For the most part, the business we place today is through a quoting process. We will, moving forward, look to migrate to a presource arrangement.” For their part, suppliers are optimistic about the proposals. Doug Grimm, CEO of Grede Holdings, a manufacturer of steering knuckles and lower control arms for the Ram 1500 and Jeep Grand Cherokee, said: “It would be terrific if we could get presourced. “I support it, and it’s a great idea. Chrysler has the expertise and the knowledge to do this. But the devil is in the details.” The process will also see Chrysler and its supplier collaborating closely on product development projects. Procurement Leaders