Bill Kopicki knows relations can be a touchy subject between car makers and their suppliers.
As the director of brakes, tires and wheels within General Motors LLC's Global Purchasing & Supply Chain unit, he helps oversee an annual spend of $6 billion (€5.3 billion). For 2016, he said GM is forecasting to use 70 million kilograms of synthetic rubber in tires and other automotive components.
He gave the keynote address at the recent annual meeting of the International Institute of Synthetic Rubber Producers in New Orleans, Louisiana. He told attendees he believes the auto maker has made great strides in trying to be a better partner to suppliers.
After his speech, he spoke with Rubber & Plastics News, ERJ’s sister publication. The following is an edited version of the interview.
How closely do you work with your tire suppliers?
I talk to at least one of the major tire suppliers every day, multiple times every single week. We talk about a lot of things, about opportunities. They could be quoting business for us. We could be working on challenges. We might be working on open issues. But we're looking at ways we can become more efficient together.
What are some of the issues you discuss with them?
We talk to them about rolling resistance. We're looking for ways to improve our product. When you look at CAFE (corporate average fuel economy), and you look at some of the challenges we have, the tire suppliers have been very instrumental in helping us achieve our goals and metrics when it comes to low rolling resistance tires. It has a big impact on CAFE. It's one of those levers that you can pull. Our engineering team, purchasing teams and tire guys, we spend a lot of time on how we can keep on improving in that area.
I would say we have a very strong relationship with our tire manufacturers. I think it's very open and transparent. We can talk just about anything. We have a tool internally at GM called the Strategic Supplier Engagement tool; and really this is feedback I give to suppliers in a lot of different areas. It could be on quality, or it could be on launch performance. I could be discussing the supply chain and how they deliver to us, but then also on material costs.
So you have your hard metrics that are measurable. But then you have your softer metrics, which would be mainly around the behaviours and how you work together and how you get things done. I'm very open with my guys, and I've asked them to be open with us. So I get that 360-degree feedback, so that we keep that open dialogue going so that we can continue to improve.
How have relationships changed over the years?
I think it's been an evolution over time. I think we've always wanted to have good relationships. The intent has always been there. But you're really seeing, we're making leaps and bounds on how to take that to the next level. I think the building blocks have been there during my career, and it's been that improvement. But over the past couple years, it's been significant improvement, and I'd like to think the suppliers would give you that same feedback.
How competitive is it in awarding contracts to tire makers? How much is price vs. other factors?
There are a lot of different elements to selecting a supplier for the business. Cost is one piece. But we look at everything: Quality, service, technology, as well as price. Getting back to that Strategic Supplier Engagement, the feedback that we provide our suppliers basically is an indicator on where they stand with us all the time around those key elements.
Sure, price is important. You have to have a business case in order to have cars and trucks that have a return. But there's a lot more that goes into it. The other thing is, it doesn't always come down to price. We have suppliers that, if the relationship is there and the performance is there, it doesn't have to be a competitive bid. It's "OK, we have you slotted for this program. It makes sense for both parties. Let's run with it.'
That's part of the evolution, the building blocks, the relationship, the acceleration of innovation, the performance. That leads to long-term partnerships.
Are most of your suppliers part of this Strategic Supplier Engagement?
Yes. Our Big Four tire suppliers are part of that. And we were very excited this year. We had two tire suppliers that were Supplier of the Year suppliers for us: Bridgestone and Continental. All of our suppliers are good, but to be a Supplier of the Year, that is what we call the prime supplier—a supplier that has performed across all of those key elements.
With all the changes ahead in the automotive industry, what does that mean for companies supplying rubber and other components to the vehicle?
Part of it is, we want to understand what can they offer and bring to the table as well. We're moving as quickly as we possibly can with what we know. We engage the Tier 1 suppliers, but we also need to make sure there's an open line of communication so we really understand what do these suppliers have to offer that maybe we haven't considered just yet. And that's what we want to hear at General Motors. It's really all about innovation and how can we apply that to the vehicle in a real world application. And that's where people should get excited that GM is moving quickly.
We'll still have cars, trucks and cross-overs. You won't have a transformation to autonomous vehicles overnight. But it will start becoming part of our future and reality sooner than what we think. Then over a period of time, we'll see how that plays out. But we see it as a business endeavour as well, to remain relevant in the marketplace. An opportunity for our revenue stream, but it's clearly an opportunity for our suppliers' revenue stream as well.
Are changes coming a lot quicker than people may imagine?
I've been with GM 25 years, and 20 to 25 years ago I didn't think of any of this. I don't remember anyone talking about any of this. It really seems like this came in the forefront the last couple of years. It's amazing to see how quickly we're already doing this. Some of our current models will have new technologies that eventually will take that step to get to autonomous vehicles without a driver one day. I have not seen anything move like this during my time in the automotive industry. And the people who are sitting around waiting for things to happen, they're going to miss out on an opportunity.
What about electric vehicles?
It's rapidly evolving. We're in our second generation Chevrolet Volt. And the all new Volt will launch later this year. It's exciting the advancements that we made from the first generation to the second generation on such things as just the electric charge itself, and just how much longer you can use that vehicle with an electric charge before it switches over and goes back to a traditional vehicle.
With projects and technology like this, how important is collaboration with suppliers?
It really takes not only the collaboration but also the partnership between the OEM and the supplier. There needs to be a level of trust; there needs to be a level where you're satisfied with operating in a grey area, whatever that may mean. Because you're moving so fast, you're figuring some things out on the fly. And from my standpoint—being purchasing—we're having commercial discussions in parallel to some of this. We're in it for the long haul, and those are the type of partners we're looking for.
In terms of nurturing supplier relationships, a lot of times with GM it was more talk, but you say that is changing?
When we deal with our traditional Tier 1 suppliers, even our approach to how do we open the door and have that avenue to new technology, our senior level leaders get involved every single month with a cadence of suppliers that come in or we go to their place, to look at their technology, what's next and what they have to offer. And so you take that from the working level to the senior level with that attention in focus, and you have a strong partner. Things happen quickly. We make decisions quicker that we have in the past around technology and what we want to put in our vehicles. So it's exciting and fun—not only for me being on the GM team, but also the suppliers. I'm getting that same feedback from them that this is the new GM. And I think that is being reflected in our great cars and trucks out on the roads today with all this fantastic technology.