Buyer-supplier relations in the European automobile component industry

Abstract

Dramatic changes in the business environment are demanding flexibility and innovativeness. These capabilities can often be achieved more effectively through external networks, rather than by internal arrangements, in the company which assembles the final product. In the automobile industry where a large number of parts are assembled and many suppliers are involved, the role of suppliers is important in developing competitive advantages. Consequently the development and operation of a world-class industry network needs to be incorporated into the strategic planning process. This article investigates supplier relationships in the European automobile components industry to determine what are the key factors in developing a supply network. The author also discusses how supplier networks are likely to develop in the future.