PSA to clamp down on poor quality suppliers

PARIS -- PSA/Peugeot-Citroen is embarking on a three-year plan to improve the quality of components it gets from its suppliers.

"We are not satisfied with the quality of our suppliers," said Jean-Philippe Collin, the group's new purchasing chief, in an interview here.

"Bad quality costs us a huge amount of money and that has got to change."

PSA wants its three-year plan to reduce the overall rate of faulty parts (usually measured in parts per million or PPM) by 25 percent every six months through the end of 2007. Mathematically, that would mean an 82 percent reduction by the end of the program.

PSA plans a range of short- and long-term measures -- 30 in total -- to improve the performance of its 700 suppliers.

The French automaker spends €22 000 million a year on car components. It also spends up to €7000 million annually on other goods and services. Total PSA sales in 2003 were €54 200 million.

Carmakers have increasingly outsourced components production in recent decades. Outsourced parts now typically represent 70 percent of the production cost of a car.

PSA won praise from suppliers for forging good partner relationships and for its willingness to reward cost savings in the most recent survey of suppliers by consulting company SupplierBusiness.com. General Motors and Ford were criticized by partsmakers in separate surveys.

PSA plans to introduce 26 new models -- not including restyled models -- between January 2003 and December 2006.

The proliferation of car models in recent years increases the risk of defective components because it raises the total number of parts, Collin said.

Collin, 48, who took office last July, previously headed purchasing at French electronics giant Thomson, and earlier worked for Valeo.

From Automotive News Europe