After disasters, group wants database of subsuppliers

By David Sedgwick , Crain staff (AN)

Detroit, Michigan -- A key industry group is trying to launch a database of suppliers and their factories, part of an effort to help companies monitor subsuppliers in the wake of floods in Thailand and an earthquake in Japan.

The Automotive Industry Action Group hopes to win the support of automakers and suppliers for the database, which would help its members track the activities of Tier 2, 3 and 4 suppliers.

But the effort is a challenge because many suppliers are reluctant to share their rosters of subsuppliers. The suppliers consider the information proprietary.

In the wake of the March 11 earthquake in Japan, automakers worked frantically to ease parts shortages after subsuppliers' factories shut down.

Toyota and other companies acknowledged that they have struggled to track their subsuppliers.

AIAG, of suburban Detroit, wants to fix that problem. The organisation, which represents 870 automakers and suppliers worldwide, would create a database of component factories.

"We are having preliminary discussions right now," says J. Scot Sharland, AIAG's executive director.

Each supplier would volunteer a list of its factories, perhaps with GPS location coordinates. The database also could include each factory's quality certification, products and other basic data.

The supplier would retain control over who is granted access to the list. In the event of a disaster, the supplier could let its customers see the list to find out whether any key factories were damaged.

In theory, the database would be attractive for suppliers because it could simplify communication with customers, eliminating the need to update each customer separately through the customer's purchasing portal. That can be time-consuming for a supplier that might have 20 or 30 customers, Sharland says.

Even so, it's unclear whether the proposed database will get sufficient support.

Some suppliers fear that if their subvendors are identified, automakers might use the information to calculate their profit margins or even buy directly from the subvendors.

"Suppliers have a real problem with sharing their supplier lists because it is their intellectual property," says Neil DeKoker, president of the Original Equipment Suppliers Association in suburban Detroit.

DeKoker says he has had discussions with Sharland, adding that he hopes the parties can agree to create a database. But DeKoker cautions: "I am not certain yet how to get at this issue effectively."

Sharland acknowledges the hurdles. "There is still a reluctance by lower-tier suppliers to give up their own list of vendors," Sharland says. "This one is not going to be easily resolved."

Ultimately, each automaker may prefer to rely on its own data network rather than share an industrywide database, Sharland says.

"That's what we are trying to figure out," he says. "It's a mess. There is no harmonisation. We'll have to see if it's doable."

From Automotive News  (A Crain publication)