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ReprintsNissan purchasing boss embraces common sense. Heresy!
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Rebecca Vest, Nissan North America's recently appointed North American purchasing head, yesterday took a stand that directly contradicts a decade-plus-long purchasing mantra at GM, Ford and other automotive companies.
It's about time.
Nissan wants 100 percent of its parts to come from "close by the plant," Vest said.
"I've been through enough disasters to know that it's lovely to be able to drive over and pick up your parts," she said after addressing suppliers at the 2011 Management Briefing Seminars in Traverse City, Mich., according to a report by Automotive News' Lindsay Chappell.
"We're going to look at the total delivered cost to determine your competitiveness," she said. "But generally speaking, a supplier in New York is going to have a tougher time being competitive supplying our plants in Mexico than a supplier who is on the ground in Mexico."
Wow.
What does that say about the drive to obtain the so-called China price, that elusive lower piece cost (which often ignored higher costs for transportation, training of previously unqualified suppliers and the reality of higher rejection rates)?
Is Vest suggesting that buying a part from 8,000 miles away in hopes of saving 3 cents per doohickey might not be the smartest move?
This seems to suggest that purchasing executives can actually be subject to bouts of common sense. It only took an earthquake in Japan, a volcano in Iceland, floods that wiped out railroad connections in Mexico and rising diesel prices that inflated trucking costs to get purchasing's attention.
Makes you wonder what they'll learn next.
You can reach James B. Treece at jtreece@crain.com.
