The entire automotive supply chain is performing poorly by virtually any financial measure you choose ― return on investment, cash flow, price earnings multiples and operating margin to name just a few. It doesn't matter if we are talking OEMs, systems integrators or lower tier suppliers. Each of these supply chain members are earning substantially lower returns than required to retain risk capital in their business over the long-term. Supply chain practices need to be comprehensively revised to drive breakthrough performance levels that will once again establish the automotive supply chain as a desirable place to invest capital. Discontinuous change is required, not incremental improvement. Six specific supply chain management recommendations are documented below based on the recently released survey results documenting financial performance for lower tier automotive suppliers jointly performed by the Original Equipment Suppliers Association (OESA) and Plante & Moran.
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