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Automotive Supplier Relationships with Steve Kiefer and Dave Andrea
Episode 7230th June 2022 • Finding Gravitas • Jan Griffiths
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The 2022 Plante Moran WRI® (Working Relations Index®) Study of North American auto supplier-Original Equipment Manufacturer (OEM) relationships is a bedrock survey in the industry. But does it really impact the bottom line? And what can OEMs do with the information?

Dave Andrea, principal at Plante Moran and guardian of the WRI, relies on insight gathered across the industry to help answer these questions. And as someone who spent almost forty years at General Motors, Steven Kiefer, chairman of The Kiefer Foundation, provides an unmatched inside look on the internal processes OEMs use for change.

“For the OEMs, [the WRI® is] a fantastic piece of data,” Steve says. It provides an invaluable view of the relationship between automotive OEMs and their supply bases (aka suppliers), which is paramount because if there is any tension, OEMs aren’t efficient, which hinders organizational growth.

Beyond just looking at the WRI® as useful data to look at how to improve, it’s also about proactively using this information within an organization to actually improve by increasing overall organizational effectiveness and leading to more growth. These actions are at the heart of improving supplier relationships. “You can see how much mutual dependency there is between the supplier and the OEM,” Dave says.

On this episode of Finding Gravitas, Dave and Steve share how the power of the 2022 WRI® Study directly impacts the change OEMs seek within their organizations, and what this tells us about the future of supply chain leadership in the automotive industry.

Themes discussed on this episode: 

  • How the WRI® has become a crucial source of data for organizational change
  • How looking at feedback objectively benefits OEMs in the long term
  • How OEMs can apply the right strategy to action the data in the right way
  • The importance of communications and alignment to enterprise success
  • The future of supply chain leadership in an ever-changing industry
  • How new startups and EV culture are shaking up the industry and what to do about it
  • The importance of humility and vision in leadership and the 21 traits as a toolbox

Featured Guests

Dave Andrea

What he does: as Principal at Plante Moran, self-described “accidental analyst” Dave Andrea is a guardian of the WRI®. Dave grew up with a passion for automotive from the get-go, and is still going strong.

On gravitas: “It’s about being aware of other people, being humble to be able to stop and help someone else. But you’ve had to get there first — you’ve had to build up your own credibility base or your own resources or your own network to be able to help someone else, and make that opportunity open up a door for someone else to succeed, just as any one of us has.”

Steven Kiefer

What he does: “Just a kid from Detroit,” Steven Kiefer recently retired from a four-decade career with General Motors. Father of four Steven is chairman of The Kiefer Foundation, which he founded in honor of his second son Mitchell who was killed by a distracted driver. This episode is dedicated to the Foundation, and we ask that you please take the pledge and support it in a way that works for you.

On Gravitas: “It’s all about setting clear vision and making sure you inspire people to do things that they never thought they could do without your leadership.”


Episode Highlights

Timestamped inflection points from the show

[6:47] WRI® history: Dave and Steve discuss the WRI®’s background, its importance to and impact on OEMs and automotive supplier relationships. “Year to year, internally at each OEM, how can they improve their working relationships to fulfill their strategies?” Dave asks.

[14:12] Taking action: Steve discusses his strategy for getting GM to take the WRI® seriously. “We made sure that everybody got exposure to it. That was the most important thing — especially that first year where the data wasn’t very good.”

[18:25] Best practice: Dave shares his experience with varying OEM reactions, and how these play into overall business strategy. “If you can take a step back and say that it’s not personal — it’s not directed at the individual — you can see how much mutual dependency there is between the supplier and the OEM.”

[22:19] Communication and enterprise issues: “Clear, transparent communications and setting of goals is most important,” Steve says. “Be very open with suppliers on what the cost challenge is, and let them be part of the solution.” But alignment between different business functions is crucial with regard to “[ensuring] that supplier relations are not just on the shoulders of the purchasing organization,” Dave says.

[27:55] Future focus: Dave and Steve share insight about ongoing change in business and supply chain leadership, how to overcome the challenges presented by EVs and startups, and how to incorporate new OEMs. “We grew up very much in this command and control model,” Jan says. “How on earth do you break away from that legacy culture?”

[40:50] On leadership and gravitas: Steve and Dave talk about which of the 21 authentic traits mean the most to them, as well as their own personal definitions of gravitas.

Top quotes

[6:19] Jan: “I couldn’t think of a better person [than Dave], quite frankly, to be the guardian of the WRI® — such an important survey, and I fear that we’ve given it lip service to a certain extent.”

[9:32] Dave: “Many of them compare it to an employee satisfaction survey: You don’t want to give your honest opinion back to your supervisor for fear of your career. It’s no different: You don’t want to give that honest opinion back to your customer who’s absolutely shaping your future.”

[11:15] Steve: “We always say feedback as a gift, and you have to decide what you’re going to do with it. But this is the ultimate unbiased feedback that an OEM can choose to look at and really look into the organization and try to understand how they can improve, because I do think that the success of the OEM is largely dependent on the relationships and the performance of their suppliers.”

[25:58] Steve: “The issue is an enterprise issue, it’s not a purchasing issue. … We saw engineering as the absolute critical partner … manufacturing and some of the other functions [also] had … very important role[s] in the supplier relationship. And over time, I think that improves as well. So it’s clearly about the enterprise, not about one function.”

[39:19] Dave: “We’ve taken the survey — as John Henke had before — to non-automotive sectors, because what we’re talking about here is completely applicable to any manufacturing or other service areas that have large, complex supply chains.”

Transcripts

Dietrich:

Welcome to the Finding Gravitas podcast. It's time to stop trying to fit someone else's mold and step into the world of authentic leadership. Connect with that irresistible force that is gravitas. Your host, Jan Griffiths will guide you through an exploration into exactly what this elusive quality means and how you can get it. Now, let's join Jan on the quest for gravitas.

Jan Griffiths:

Hello, and welcome to another episode of the Finding Gravitas podcast. And today we're going to be talking about authentic leadership. Well, of course we are, we always talk about authentic leadership. But today we have a slightly different spin on the subject. We're going to talk about the WRI. WRI you might be thinking, what's that? The working relations index. It's the study conducted by Plante Moran that looks at the relationship between the automotive OEM and the supply base. And there's a few things that I'd really like to know, I want to know, does it really impact the bottom line? Does it really give the OEM some good information, some actionable data? And then what do they actually do with it? And do they escalate it within their organizations? And what does it tell us about the future of supply chain leadership in the automotive industry? Let's dive right in and join our guests Dave Andrea and Steve Kiefer. Today, I am thrilled to welcome to the show Steve Kiefer, chairman of the Kiefer foundation and former VP of global purchasing and supply chain for General Motors. And if that isn't exciting enough, we've also got with us, Dave Andrea, Principal at Plante Moran. Most famously known as the protector of the WRI study, the OEM working relations index, and we are going to talk about automotive leadership. But we're going to tailor it and focus it to the results of the WRI. But before we get into the nitty gritty detail, Steve Kiefer what's your story? You are not in on pomp and ceremony. This is not a presentation. This is not a corporate gig. Tell us. What's your story, Steve?

Steve Kiefer:

Well, thanks, Jan. It's really a pleasure and honor to be here and my story in a in a nutshell. I'm just a kid from Detroit. I grew up as the youngest in the family of six to a father who was an engineer at Ford Motor Company. And I spent my early days working on cars, working on cars in high school and always had a passion for for cars, and eventually the auto industry. I went to Michigan State University to get a mechanical engineering degree and then went on to the University of Michigan to get an MBA. And I actually hired into General Motors when I was 19 years old as a co-op student and just finished 39 years as I retired on April 1 from General Motors. So I had a great career working for General Motors, and also had a couple of years overseas. I've managed to spend about 15 years and overseas assignments with my family, in Europe and in Asia. And it's just been a wonderful path. And it's great to be moving on to the next chapter of my life.

Jan Griffiths:

Yes, and what an exciting chapter that is. But before we go there, tell us a little something about the personal side of Steve Kiefer, maybe something that people don't really know about you. Come on.

Steve Kiefer:

Well, I have four children. And I've spent a lot of time actually working on a family foundation that in honor of my second son Mitchell who was killed by a distracted driver. So in my next chapter here, I'm spending most of my time as the chairman of the Kiefer Foundation, which was founded in Mitchell's honor and we have a goal to bring an end to distracted driving so that other families don't have to go through what myself and my family have gone through.

Jan Griffiths:

Yeah, that's wonderful. That's wonderful. Thank you. Thank you for sharing. Okay, Dave, what's your story?

Dave Andrea:

Well, I say that I'm an accidental analyst. Actually. I grew up like Steve loving cars, reading Hemmings in automotive news and and ordering every part I could add a JC Whitney to install on the my parents and siblings cars and everything. I grew up in Canton, Ohio and I was lucky that up the street from me was the actually the head of personnel at the Ford Canton forge plan when it was open. And Bob Davis would always take me down to the plant and I loved watching the heavy machinery and love that there and I also through Miami of Ohio when I was undergraduate worked every hour I possibly could when I was at home at the Sears auto store, I was the parts runner. So that really got me knowing the parts and components and the like, there. But my career really is in three segments. First was academic at the University of Michigan when I was went there after Miami of Ohio for my MBA, I looked up two key people, Dave Cole, who ran the office for the study of automotive transportation, there. And then also David D. Lewis. David D. Lewis was really the biographer for Ford Motor Company at that point in time, and it was great historian. And so I was a student of the industry. Then second part of my career was with a trade association, the original equipment suppliers Association, and that I wouldn't give up for anything going through 2008 and nine and the Great Recession, and being the spokesperson for the supplier sector, through all that. And then third is here right now in the consulting area. I was also an Investment Analyst at Roni and company when there was a Roni and company in Detroit and chief economists doing production and sales forecasts had a couple of consultancies, and now at Plante Moran heading up our supplier relations analytics practice.

Jan Griffiths:

And I couldn't think of a better person, quite frankly, to be the guardian of the WRI such an important survey. And I fear that we've given it lip service to a certain extent. And I'm sure you're gonna correct me on that. But I want to talk about the future of the WRI and what we're gonna do with the data. But first of all, before we get into that, Dave, tell us a little bit about the history behind the WRI. How long has it been in existence?

Dave Andrea:

This is the 22nd year actually. And it was started by Dr. John Henke is a professor of marketing at Oakland University in Rochester, Michigan. And, and it started in the early 2000s actually working with a guy named Tom Stallkamp who's will be very familiar within the auto automotive audience here. Tom was creating a Chrysler, the score program, which was the supplier cost reduction effort program, really talking about shared efforts with the suppliers to get better costs. And he was also talking about an extended enterprise, not talking about us versus them, but really about how to work with the supply base to make the OEM more competitive. But he needed research and a little quantify was, what he was talking about, was it really actual, and that's where he got together with Dr. Henke. And John put the academic rigor behind the WRI talking about buyer characteristics and business practices to roll up to a standard index that the industry can use to compare the OEMs against one another. But more importantly, and this is really where we've changed the conversation, I think, is year to year, internally at each OEM. How can they improve their working relationships to fulfill their strategies?

Jan Griffiths:

Yeah, and that's why I think it's so important that it's an independent study, right? Because I fear that in the supply base in the tiers, where the in the tiers, we're very much afraid of the OEMs. And I'm gonna say it because it's out there, right there is fear, because they control so much they have so much power, they control so much revenue. And so it's so important that this report is conducted by a third party, there is no bias. It's just the fact it's the data. And that's what it's all about right, Dave.

Dave Andrea:

Well, absolutely. And that's because of the structure of the auto industry, just the the dollar size, in terms of the leverage between the OEMs that are at you know, near $200 billion or so in the revenues and the like, versus but even what we find the largest of the first tier suppliers, right, who are large and powerful themselves. They use us to communicate back to their customer because they don't want retribution. And many of them compare it to an employee survey. Right employee satisfaction survey. You don't want to give your honest opinion back to your supervisor, right. For for fear of your career. It's no different. You don't want to give that honest opinion back to your customer who's absolutely shaping your future.

Jan Griffiths:

Steve. This is great survey. You know, it's been around for a long time. Is it as soft and fluffy and nice to have survey? Or is there really a bottom line? Hard line impact? Is it really there? Tell us you've been in that position of major OEM, where you've been the guy controlling the entire supply base for General Motors. So tell us, what's your perspective?

Steve Kiefer:

Well, yeah, first, let me say that one of the benefits and one of the things that comes along with the survey is some verbatims. And I can tell you that many of the verbatims are not soft and fluffy. They're pretty direct into the point, which is really, really good feedback for the OEMs. I should also say that I spent about 20 years throughout this career, I was actually spun off with a large tier one supplier, Delphi. So I spent about 20 years as a supplier, in addition to my 20 or so years, as a as an OEM, which I think is an interesting perspective, I would say, as a supplier, we always appreciated the opportunity to give this feedback to the OEMs. Because all OEMs are not created equal. And we definitely had some strong opinions on which OEMs were easier and more difficult to work with. So I think it's much appreciated by the suppliers. But for the OEMs, I think it's just a fantastic piece of data. I mean, we always say feedback as a gift, and you have to decide what you're going to do with it. But this is sort of the ultimate sort of unbiased feedback that an OEM can choose to look at and really look into the organization and try to understand how they can improve because I do think that the success of the OEM is largely dependent on the relationships and the performance of their suppliers.

Jan Griffiths:

What did you do with it, when you started getting this feedback at GM?

Steve Kiefer:

You know, the first year I had it, it wasn't very good. I can say that my first year. And as the head of purchasing, I wasn't satisfied, I wasn't satisfied with our position, I wasn't satisfied with how we ranked relative to other OEMs. So I spent a lot of time dissecting the data and putting a team on each of the areas of feedback. And we really did a sort of self reflection as to, you know, what we thought we might be able to do to improve. And then we actually had the discussion with our tier one suppliers. We went in and basically said, Okay, this is the feedback we've got, we didn't know that this is exactly how you felt about us, you know, full disclosure, and without any retribution, would you be willing to talk to us about ideas on how to improve. And in every case, I would say the suppliers were maybe a little nervous at first, because, as Dave mentioned, it can be a little scary. But when we were open and honest about what we're trying to do with it, every supplier wanted to work with us to try to make us better. And you know, I can honestly say we had a huge improvement from year one to year two, as I recall. And I think a lot of it was due to just being willing to open up and listen to the feedback truly listened to the feedback of the suppliers,

Jan Griffiths:

From a supply chain leader perspective, was there a tendency to sort of discounted in the beginning and go oh, it's just, it's just a survey? You know, we're great, we're good. I mean, was it was there a little bit of that in the beginning,

Steve Kiefer:

there never was for me only because I had been a supplier for 20 years. And some of the things that I saw some of the verbatims, I saw, honestly, I had seen them as a supplier, not only with general to General Motors, but with other OEMs. So I knew that there was some truth in it. I will say that there were some people that dissected the data and said, hey, you know, these are probably just the suppliers that aren't winning business with us. These are probably the suppliers who don't have a future. So this is their shot at you know, basically, you know, taking a poke at us on the way out, I honestly don't think that's the case. I think there's honestly some some truth and some learnings in every one of the the verbatims. And in all of the data that I that I saw on the survey.

Jan Griffiths:

You had a large organization at GM? How do you get an organization like that, with so many buyers and managers and directors? How do you get them to take it seriously and actually take action? Because what I see often is when in large companies, the leaders, such as yourself, believe it want to do it, but then filtering it out through your organization is a massive task. How did you do that?

Steve Kiefer:

Yeah, it's a it's a good question. I mean, we always started with, you know, a very large, you know, basically all employees are purchasing and supply chain organization in a large, you know, in a large auditorium plus everybody connected by video. And we went through the data. And we basically said, This is what the suppliers are saying about us. So we made sure that everybody got exposure to it. I think that was sort of the the most important thing, especially that first year where the data wasn't very good. And then we, you know, we set up teams, and we basically said, because, by the way, the results, you know, are quite detailed, and they vary by you know, as we call them commodity, so different different parts of the organization. We're getting different levels of feedback. And we made it a point to basically make sure that each organization was getting their data and really spending time on it and trying to understand it. We I also had follow up meetings with the organization with Dr. Henke to try to talk about how some of this stuff could be interpreted. And then we did something that I thought was was quite clever. In the early days, we took some of our newest young employees, we call them track employees, people that are in their first two years of employment that are rotating through different areas. And we actually gave all of the data to them and said, we'd like you to analyze it, and tell us you know, what you think of it, and how you know what you might propose to it clean sheet, you don't have any of the baggage of the old auto industry, what kind of things would you do, and some of the ideas were really, really quite clever. And then finally, it became a little bit of a competition because again, we had each director had their their own score. And just by paying attention to it, and making sure that people knew that this was important to us as an organization, because it's important to our suppliers, people naturally got involved and did the right thing to make them.

Jan Griffiths:

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Steve Kiefer:

relationships much better.

Jan Griffiths:

Does it get exposure? We're talking about getting the message down through the organization? What about up through the organization? Does it get exposure up in the organization and across?

Steve Kiefer:

Yeah, it certainly does. This is the bellwether survey for you know, supplier relationships. So when it comes out people, pay attention. I can recall, in my first year again, when the results weren't that good. I think it was within a week or two, I presented the results to the General Motors board of directors, and just had a discussion with them as to here's my interpretation as to what's wrong and why we ended up where we did. And here's what we're going to put in place to improve it. And thankfully, when I came back a year later, we were on the positive end of the meteoric rise. So it was much easier the second year to explain to the board why this was a good survey, and why it mattered.

Jan Griffiths:

Dave, you see different OEMs respond in different ways. What's a best practice that you've seen? From your perspective?

Dave Andrea:

Well, one thing certainly is is matching the WRI up to performance reviews and making that linkage and GM has been public about that. And Steve, you can comment on that directly. That way, because it always got into the the issue of you get what you measure, right. And in the purchasing organization, if all you're measuring our cost down are your budgets. That's what naturally it's rational the personnel your organization is going to go after. And so so that's that's the important one of the important pieces, just picking up a couple of things that Steve talked about on the on the verbatims in the comments. They are very, very direct. But if you if you can, if you can take a step back and say that it's not personal, it's not directed at the individual. You can see how much mutual dependency there is between the supplier and the OEM. The suppliers just want the OEM to improve their competitiveness, right? Because they're interrelated that way. And so you can do that the companies that go through those verbatims and break it up by the commodity groups, I think you do see their their scores improve the following year. From that standpoint, the other thing that that Steve would always do and this this always impressed me when I was at OESA had our town hall meetings and, you know, in front of 600-700 suppliers and all of the directors, all the commodity group directors would be there from GM, Steve would always have that in his presentation, he would always talk to it. And right in that front row were people who could do something about it. And behind them were 600-700 people who are hearing that same message. So that those are the elements I think that you do. But lastly, let me just add this, Jan is also linking supplier performance, whether it's the WRI specifically, I think the WRI measures it but to your corporate strategy. And there's a couple of OEMs right now who are doing that very explicitly. And you can see their their numbers are going up as well, as well as their financial performance.

Jan Griffiths:

Can't be just a supply chain thing. That's off to the side. You're right, it's got to be part of an overall business strategy. It's a business business initiative, as a recovering supply chain person. I remember the pressure of cost reduction, of course, and that cost reduction is driven by the OEMs. Thank you, Steve. No, I'm just kidding. That cost reduction pressure is very real. And there's a tendency as a supply chain leader in the tier one supplier base for sure that it's all about the numbers. If you're not working on cost reduction, it's just a waste of time, just don't even spend your time working on that other stuff. Yet we know that there is a line from our relationships with our suppliers and our behaviors to the bottom line. It's not as clean and as clear as a pure direct purchase part cost reduction. But there is a line there. So I, Steve, help us help our audience. understand those particularly in a tier one, supply chain leaders who are faced with so much cost reduction pressure, how do they balance this and work on all of it the relationship, the behaviors, and the hardcore cost reduction?

Steve Kiefer:

Yeah, it's a good question. And it's an ongoing challenge. But I would say first and foremost, clear, transparent communications and setting of goals is most important. That's what I always found in the, in the purchasing role, we developed a process that we referred to as our strategic supplier engagement program, where we had a very clear scorecard. And it wasn't just about cost or price, it had elements of safety and delivery and quality, and innovation and a number of other things. And we made it very clear to our suppliers that you know, cost is important, but you have to basically deliver on all of these elements. So I would say that first and foremost, to make sure that it wasn't just about cost. And then the second thing I would say is, you know, trying to be very open with suppliers on what your challenge is, and what the cost challenge is. And let them be part of the solution. Because I think so often, what I had seen in the past is we would be very narrow in our focus as to what a requirement might be for a cost reduction. But there's many ways to make an organization more profitable, let's say, sometimes we add cost and it makes the vehicle more profitable. So I think getting into a very open discussion with our suppliers who, for the most part are amazing and know their business better than the OEMs do. We could find all kinds of ways to either take out cost, improve profitability, improved delivery, reduce inventory, there's all kinds of ways that the suppliers could help us if you if you're very broad in your request and allow them to basically be creative and help you find solutions.

Jan Griffiths:

I'm looking at the Plante Moran article and you talk a lot about communication. Communication drives the WRI What are your your thoughts on communications?

Dave Andrea:

We're looking at for Toyota and Honda who have consistently been at the top of the scorecard there. I don't think any supplier would say that they're soft on costs, or price pressure that way it's it's how do you get there, but it's it's back to your point about consistency through these large purchasing organizations that everybody acts that same way. One of the surprising things out of the the survey this year with all of the supply chain disruptions that we've gone through two questions about flexibility. Did the did your customer gives you flexibility to meet quality considerations or did your OEM customer give you flexibility to meet productivity and cost reduction efforts. Those two measures mapped to relate to the increases that Honda and Nissan had in this year's survey. And I point to those because with material shortages, what kind of work arounds does engineering need to provide for alternative materials? Or what in a logistics constraint? How can manufacturing work with you to deliver work arounds to still get those parts into the plants that are needed, and the light? And that's the type of its communication, but it's really about alignment to those other functional areas that supplier relations are not just on the shoulders of the purchasing organization.

Jan Griffiths:

Steve, what are your thoughts on that?

Steve Kiefer:

The only thing I would add to that is, because it's a really important point that the issue is an enterprise issue. It's not a purchasing issue. I can just recall also, as we as we engaged in these discussions at General Motors, it was always as we say, purchasing an engineering joined at the hip. So that was, you know, whether it was reviewing the surveys or talking about improvement plans. We saw engineering is the absolute critical partner. And as the years went on, you know, also I would say manufacturing and some of the other functions having a very important role in the supplier relationship. And over time, I think that improves as well. So it's, it's clearly about the enterprise, not about one function.

Jan Griffiths:

Yes. But yeah. And it's up to the supply chain leader to know, take the survey and connect that enterprise together. Right, and lead the charge, I see the supply chain leadership as having that role.

Dave Andrea:

Definitely, yeah. When you combine and supply chain with purchasing that you don't have that as a separate organizational report. And it also goes back to your question of how do you take a survey like this up the organization, for as much cloud as a global vice president of, of supply chain has, that person had better have their back from the their president from their CEO, as well as the board of directors, this is an important element of achieving your your goals and objectives.

Jan Griffiths:

Let's talk about the future. And we've got this data, we've got over 20 years of data, which is which is wonderful information to have, right? We've got great insights from Steve as to what to do with that data. But I want to talk about the future. And Dave, in the report, you claim, and I quote, that the business, as usual, will change. How exactly will it change, Dave?

Dave Andrea:

Well, let me go through a few points. And we can circle back and I can elaborate on anyone that you want to pick up on Jan. The first is the WRI and the relationship really revolves around trust. And I remember the first time when Plante Moran took it over, and I went back with the results that presented them to the OEMs. They all said that's nice. But what do we do with trust, right? So, we broke it down. And it's three key elements. It's about realistic expectations. It's about fulfilling commitments. And it's about information sharing. Now, we'll still be talking about trust 10 years from now. But think about the component sets that purchasing will be responsible for in terms of software, in terms of other types of not high volume, hard part's with sets of tools and everything else behind it. So those definitions of expectations, commitment and information will change will definitely change because there will also be a whole new set of suppliers, and not a whole new set, but a different set of suppliers that will be involved there. I think the second is along our rules of engagement in terms of looking at terms and conditions. And if you look at how the industry has been brought up, it's around amortization of the engineering and design and development work into 2-3-4 years of hundreds of 1000s of parts. But if you think about, again, the new era here, of a lot of risk, with lower volume and transition to EVs are I would say more on the research side of the r&d than the development side. How do we pay for that in the industry amortization is going to be more difficult or even think about over the air updates. How does that get paid for? I think the other element is looking at all the environmental, social and governance commitments that the OEMs are making. And in turn the supply and the OEMs want supply alignment down through the supply base, there? Well, that means that the purchasing organization has to deliver far more than just price quality and delivery. And so that's another element that I think will change. And then lastly, let me just mention, if the industry really goes this this way, is the whole build to order thought, you know that we take out inventories, we're not going to go down to zero on the on the dealer lots. But if we take out from a build to inventory to a build to order that will shift risk significantly to the supply base that we just we have to deal with it. We just can't shift at all there.

Jan Griffiths:

Clearly there's recognition that business as usual will change to use your words, right? There's there's no question. We're in a period of massive disruption. But we've got to be able to win in the workplace, as well as the marketplace. We're very focused on the marketplace and what what that's going to take, but we've got to win in the workplace as well. And I'm stealing that from Stephen Covey and Doug Conant to gentleman that I interviewed on the podcast, but it's so true. So Steve, my question to you is this, how do you see supply chain leadership changing in the future?

Steve Kiefer:

Yeah, I think there's a couple of things that in Dave head on several of them, but a couple things I would probably add is, first of all, I believe, COVID. And you know, these global pandemics have taught us a lot. Also, it's probably two or three things I would point out. One is I think there's going to be a very significant change in how we manage supply chain risk, we've all seen what risk we take on when we've got a large portion of our supply base in areas where there may be geopolitical risk. So I think we're gonna see a trend towards more localization and maybe changing the footprint as to where a lot of the parts for not just automobiles, but for all industries are made more looking at how to manage the risk of supply chain. Maybe the second thing that I think was really quite significant for all of us is the ability to work virtually while I still believe that we are a bit of a relationship business, and these relationships with suppliers certainly matter, I think we're getting much better at finding ways to maintain those and build those even in a virtual setting. So I think we will see a bit of change there. And then the last thing I would mention is, I think the dynamic of the supply base is going to change a lot of the traditional suppliers are certainly moving into the EV and autonomous vehicle world. And they will be winners in that space. But we've got a lot of new entrants, and the new entrants, I think can learn a lot from the auto industry. And from surveys like this, and vice versa, I think we can learn a lot from the startups in trying to do business in a different way, the way we do business with some new entrants may change the whole way that we work together with the supply base. And in many cases, you know, we're getting into these relationships where your supplier may actually be your JV partner, if I look at, you know, some of the things we're seeing in battery plant production, former suppliers that are now you know, JV partners, like in the case of General Motors, with LG energy systems. This is a very different dynamic, you really have to be partners. And I think it's going to change the way we work, probably, in my opinion, for the positive because I think, you know, the partnership behavior is really an important one. I mean, the last thing I would I would mention is this transition into electric vehicles and autonomous vehicles. I couldn't call it exactly a clean slate, but it is a chance for, you know, all kinds of new entrants to change the whole profile of the supply base in the automotive industry. When you look at every OEM announcing 10s and 20s and 30s of billions of dollars of investment, if you just carry that out through the supply base. It's really a complete redo of the auto industry over these next, you know, 10 to 20 years. And I think that's a huge opportunity for a number of companies.

Jan Griffiths:

You said clean slate. And I'm glad you said that. And you mentioned California, the EV sort of startup culture, right. But here's something that I see happening. And that is in traditional automotive, we grew up very much in this command and control model, right, and we're doing our best to break away from it and I get that. And then we've got OEMs who are separating and like you said, putting a lot of investment in new divisions, completely new business units to separate it because they recognize that the EV business is different. But I cannot get my mind around the fact how on earth do you break away from that legacy culture? To start, you know, basically a brand new company focused on EVs and autonomous vehicles With a completely different mindset and way of doing business, because that's the advantage that the California startups have, they don't have all this legacy stuff, forget the legacy infrastructure and costs. I'm not talking about that, talking about the legacy of the way that we lead, the way that we lead in automotive, and the command and control is built up around mistrust. And now we're trying to say, oh, but you know, what we're going to trust. Now we're going to triple it's all going to be good, really, you got decades of mistrust that we're going to have to change and learn from the startups. And I'll call it the California tech culture, which has its issues in itself, I wouldn't deny it. But that's such a huge challenge. What do you see, Steve? And how do you see that manifesting in supply chain leadership?

Steve Kiefer:

There's a number of different ways people attack this, I can only comment on the ones that I've seen, you know, closest within General Motors. And of course, this is all public information. But when I looked at years ago, when General Motors acquired what was called cruise automation, at the time, the autonomous vehicle startup in California, and took this small startup and started expanding it. And now of course, it's the core of General Motors, autonomous vehicle work. And I think that's a great example of how a company has maintained its California startup culture, but has really taken advantage of the huge deep resources and knowledge within General Motors, I watched how that team was built. And I think that's really a perfect example of bringing all the legacy experience all the deep laboratory and technical resources and experience to a startup and helping it be successful. So I think that's a model that I think could be quite interesting. I'd also point out, you know, I mentioned earlier, the relationship with LG energy systems, working with a very innovative, you know, battery supplier, and basically changing the culture of both companies. I think that's a, that's another way it can be done. And then the last one, I would I would point out, and again, it's well written about is what I think is going to be a very successful story of the Hummer EV at General Motors when I look at how the team was put together, and they were basically, given the challenge to do an amazing vehicle in a very limited amount of time. And the way that team was pulled together was very different. It was kind of different than the normal development process within General Motors, there was a term we started using during COVID. When we help the production of ventilators down at the Kokomo Indiana plant, it was done an incredible time, we started using the the term ventilator speed defining something that's done just basically overnight, that term is used quite a bit at General Motors. And it really is a sign of a company that, you know, has over 100 years of legacy in history, but it often, in many cases can can move like a startup,

Jan Griffiths:

you're giving me hope, Steve, I'm thrilled to hear that. And you know, I was not thrilled several months ago to hear about another OEM that was going actually more in the command and control direction, and trying to force upon the supply base, very restrictive terms and conditions. And you know, this whole idea of command and control is just not going to fly and it's not going to fly internally, we're not going to be able to get Gen Z on board. And it's definitely not going to work as we transform this industry for the future. But I am very interested to hear from Dave as to what he thinks about the EVs and the startups the new OEMs Shall we call them? Dave, any thoughts to get them included in the survey?

Dave Andrea:

We're always open to including more OEMs into the survey. In fact, just as we record this podcast, I had a conversation with one OEM this this morning. And that's coming really from the supplier side because of their customer backs. Right. And these are becoming more important customers to the suppliers. And and just as Steve mentioned earlier, there is a lot that in a in a positive way that the startups can learn from the legacy supplier supply base to in terms of what they want out of the relationship in terms of those expectations, commitments, and information sharing. So we're always open to including more and and I'll also say that we've we've taken the survey, as as John Hanke had before, to non automotive sectors to because what we're talking about here is completely applicable to any manufacturer in your or other service areas that have large, complex supply chains.

Jan Griffiths:

Well, I'll do everything in my power to help you get some of the new OEMs on the on this survey because I think that would just I would give us such a great, you know, scope of data and rich data that we can work with. And then where the Germans at? Where's the German OEMs? Where they at?

Dave Andrea:

We're talking, we're open to being inclusive to all vehicle manufacturers. Timing is everything. And you have to align up what their leadership is, from their commitment to supplier relations or the balance of their functional organizations between purchasing or is it really an engineering driven company, then you'll see the interest in those elements and not necessarily in purchasing. So, you know, time will tell, Jan. I'm working on at all.

Jan Griffiths:

Okay. All right. Let's talk about the 21 traits of authentic leadership. Steve, out of the 21 traits of authentic leadership, which one resonates with you the most and why?

Steve Kiefer:

As I think about them, I kind of think of it as a toolbox, I think a good leader really needs all of them and needs to, you know, continue to work on sharpening all those tools, because it's, it's hard to pick one or two that I would say are most important or resonate most. I would probably focus on vision and purpose I because I think especially in a as a leader in a big organization, trying to roll out a very clear vision so that every everyone understands not only where you're going, but I mean, even more specifically, what are we going to look like six months from now or one year from now a very clear picture, and a very clear explanation as to why it's important, I find that to be the most important attribute. With that, I think there's the the communications and the listening. So communicating that that vision so that everybody understands it. And then listening, I mean, making sure you're getting feedback on it, because sometimes we are off base. So getting feedback from the organization, and really listening to concerns or confusion about your purpose and vision, I think are extremely important to make sure that you that you really bring the whole organization along.

Jan Griffiths:

Yes, I like that. Dave?

Dave Andrea:

Yeah. Well, I certainly would agree with Steve that on any given day or in any given situation, right, you have to draw on one or many of those 21 that you highlight, Jan. I looking through there, I would pick vulnerability from a standpoint that it's looking at the other 20, it was such an enabler, right, you know, thinking about self awareness or heart first leadership, or looking at empowerment, all those other elements. In the last, your you have the self confidence, it's probably a lot is the self competence of being vulnerable. Those other elements are really tough to do.

Jan Griffiths:

Yeah, so two, we got to put yourself out there, right? No matter what, you got to do it.

Dave Andrea:

Right. And and a lot of that you had to you can see, as you go through those elements on a personal level, you could put them at a corporate level to man vulnerability at the supplier side, we all say, you know, to raise red flags, and to give us the bad news first, and all those things, but you never know how that information is going to be used. If you are vulnerable, and you put that out there and your customer responds positively or in a good way. From that standpoint, then that's where you move the relationship forward.

Jan Griffiths:

Yeah, I like that. If Gravitas is defined as the hallmark of authentic leadership, and it's the name of my business, and I get to define it any way I want. So if Gravitas is the hallmark of authentic leadership, Steve, what is Gravitas to you given that definition?

Steve Kiefer:

Well, I think it's all of these traits. But I think it is the method that we use, and whatever one of the tools we think is most important to us. But it is whatever we use to inspire an organization or inspire a group of people to do something that they possibly didn't think they could do prior to the encounter. So I think it's all about setting clear vision and making sure you inspire people to do things that they never thought they could do without your leadership.

Jan Griffiths:

Yes, yes, there it is. Dave, what is Gravitas to you?

Dave Andrea:

Well, on my desk, I have the pen and pencil set that my dad had on his desk, and there's an inscription on the base of that that says, No man stands so tall as when he stoops to help a child. Now, my dad was a pediatrician. So I always I always looked at that quote, in that context, right as my dad, the pediatrician, but as you asked us about this, you know, I took a look at that, and it's about being aware of other people, right. It's been humbled to be able to stoop and help someone else. But you've had to get there first, right? You've had to build up your own credibility base or your own resources or your own network to be able to help someone else. And make that opportunity open up a door for someone else to succeed, just as any one of us have. So that to me, I'm gonna look at that quote a lot differently.

Jan Griffiths:

Yeah, great. I love that. Okay, closing comments. Gentleman, Steve, closing thoughts for our audience today.

Steve Kiefer:

I just really enjoyed the opportunity to have this discussion, I think the supplier and OEM relationship is something that's going to be incredibly important for the future and for the decades to come. So I hope we continue to expand on this. And it's my pleasure to share some of these thoughts with you. And I hope at some point, we can talk more about the future. And I'll, I'll fill you in on some of the things I plan to do in the future with my own purpose in life, which is this, this goal to bring an end to distracted driving around the world to save as many lives as possible and make the roads of the of the world a safer place.

Jan Griffiths:

Yes, absolutely. Dave, closing thoughts.

Dave Andrea:

Jan, I appreciate the opportunity that you gave us to bring Steve and myself together to talk about the survey. And you talked about it not from the competitive well, from the competitive standpoint, but one OEM versus another OEM, what you really forced us to take a look at was the leadership aspects of it that really are needed to deliver these kinds of the results in this in improving supplier relationships. And that gets started at the top of the organizations and gets driven down into each individual buyer, but engineer and manufacturer, manufacturing executive and the like. And so we appreciate that opportunity.

Jan Griffiths:

Well, as you know, authentic leadership is my thing. And I want to make sure that I provide a platform, that's really a voice for the supply base in automotive. That's what this podcast has become. You know, not only is it a place where people share how they practice authentic leadership, but it's become this this place where we can talk about the things that sometimes people talk about behind closed doors or don't really want to share. So I thank you both for your time today. And I'm thrilled to dedicate this episode to the Kiefer Foundation. And to our audience, I would like to say please take the pledge and support the foundation in a way that works for you. To find out more, you need to click on the link in the show notes. And check out the key for foundation. Steve, just a few more closing comments about the Kiefer Foundation, because we are thrilled to dedicate this episode to your cause and your mission.

Steve Kiefer:

Well, thanks so much. We founded the Kiefer foundation a little over five years ago, just after losing my son Mitchell to a distracted driver. And unfortunately, what we realized is we're not alone. There's the official stats say that 10 people every day in this country are killed by distracted drivers. And in reality, we know it's way under reported. And we think the real number is closer to 50. So if you can imagine 50 people every day in this country, killed just because people feel they have to be on their phone, this sort of senseless, selfish act that we talk about. It's something that we have to bring change to. We're focused on awareness and technology and legislation. Most recently, we put a lot of effort in trying to get what we refer to as hands free legislation done in every state in the country. This basically makes it illegal for you to hold a cell phone while you're in a car. We know that's not the only form of distraction, but it is the one that's creating most of the problems in these past five to 10 years. Currently, there's 24 states that have adopted hands free legislation in those states. When those laws are in place, it's illegal to hold the phone and crashes have been reduced deaths have been reduced. One of our short term missions is to get this done in the remaining 26 states across the country with that we believe will start to bring change in behavior, much like strict drunk driving laws brought back in the 80s and 90s. And we think with social media, we can do this much, much faster. So one of our very important goals now is hands free, Michigan and about 14 other states that we're trying to get done yet this year to really start saving lives.

Jan Griffiths:

Wonderful

Dietrich:

We love feedback. Email Jan directly at jan@gravitasdetroit.com to tell us about your journey into authentic leadership. We want the show to be meaningful to you. So leave a comment on what you thought of today's episode and let us know if there's any topics that should be covered in future episodes.