Lower tier automotive suppliers lagging behind upper tiers in e-business

TRAVERSE CITY, Mich. (Aug. 8)—Automotive suppliers are lagging behind the upper tiers in the adoption of e-business tools, according to a study authored by the Center for Automotive Research at Altarum and sponsored by collaborative systems provider SupplySolution. Eighty-one percent of lower tier survey respondents expect their customer to reduce their supply base within the next two years, while lower tier suppliers say they themselves will use a vendor's capability to conduct e-business as a determining factor in consolidating their own supply bases. Nearly three-quarters of subtier respondents believe inventory reduction tools would have the greatest impact on their organizations. Only 18.9 percent of suppliers in the survey believe e-procurement tools are required for success today, but more than double that amount expect electronic procurement tools to be required within two to three years. "This research makes it clear that Tier 2 and lower suppliers are willing to implement e-business tools when it makes sense to their business, but not until then," said Lee Grubb, chief financial officer of SupplySolution.