John Henke, Jr., Ph.D., is a 1958 graduate of Notre Dame.
"Our study proves that the most significant economic impact a supplier has on its OEM customers' profits comes from the non-price related benefits it brings to the automaker," said Henke.
Henke's findings were released yesterday at this year's Center for Automotive Research Management Briefing Seminars in Traverse City, Mich.
According to the study, Chrysler, for instance, which went through a decade of turbulent ownership changes from 2000-2012 that included the worst supplier relations ever in 2007-2008, would have booked on average $2 billion more in annual operating profit and $1052 more in profit per vehicle if, during those years, it had maintained the higher level of supplier relations it achieved in 2011-2012. This equates to a total of $24 billion in unrealized income over the period.
Similarly, annual profit gains could also be realized by all the automakers by improving supplier relations. For instance, if each of the six automakers had scored only 10 percent higher on the 2014 Working Relations Index®, each would have gained an additional $58 to $152 in profit per vehicle, or $98 million to $400 million in operating profit, which can be attributed to the increase in better relations, according to the study.
Henke is president and CEO of Planning Perspectives in Birmingham, Mich., (www.ppi1.com), and professor of marketing at Oakland University. For the past 25 years, Henke has specialized in studying and reporting on OEM buyer and supplier relations in the automotive and 17 other industries.
For the past 14 years, he has published an annual ranking of the six major North American automakers called the Working Relations Index® that ranks the relations the Detroit 3 and Japanese 3 automakers each have with their suppliers. The German automakers were recently added.
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About Notre Dame Preparatory School and Marist Academy
Notre Dame Preparatory School and Marist Academy is a private, Catholic, independent, coeducational day school located in Oakland County. The school's upper division enrolls students in grades nine through twelve and has been named one of the nation's best 50 Catholic high schools (Acton Institute) four times since 2005. Notre Dame's middle and lower divisions enroll students in jr. kindergarten through grade eight. All three divisions are International Baccalaureate "World Schools." NDPMA is conducted by the Marist Fathers and Brothers and is accredited by the Independent Schools Association of the Central States and the North Central Association Commission on Accreditation and School Improvement. For more on Notre Dame Preparatory School and Marist Academy, visit the school's home page at www.ndpma.org.