DETROIT -- Bo Andersson, General Motors' top purchasing executive, holds up two suppliers' report cards.
Rankings are color-coded: Red signifies failure; green, success; and yellow, partial success. Supplier A, Andersson says, holding up a chart of boxes that are mostly green, probably likes the grading system. Supplier B, he continues, holding up a chart checkered with red, probably doesn't.
"But they cannot argue with us," Andersson says. "We have the box chart."
The ubiquitous box charts reflect the sweeping system of numerical measurement that Andersson has emphasized since becoming GM's vice president for worldwide purchasing in 2001. Andersson is the latest in a line of tough GM purchasing chiefs, including the infamous J. Ignacio Lopez and Andersson's predecessor, Harold Kutner.
With a strict by-the-numbers approach, Andersson has eliminated much of the guesswork from supplier contracts. The good-old-boy network is out. Metrics are in.
Suppliers chafe under the system's constant pressure for quality improvements and price cuts. They thrive or fail based on whether the boxes on their chart are green, yellow or red. So do GM's purchasers, whose performance is ranked in the same way.