The following is an excerpt from a recent article discussing supplier relationship with theBig Three North American automakers. "the Big Three select select suppliers on the basis of lowest price and annual price reductions" said Neli De Koker, president of the Original Equipment Suppliers Association. "They look globally for the lowest parts prices from the lowest cost countries," De Koker said. "There is little trust and respect. Collaboration is ,issing. "Japanese auto makers teant long-term supplier relationships. they select suppliers as a person would a mate. The Big Three are quick to beat down prices with methods such as electronic auctions or rebiddig work to a competitor. The Japanese are equally tough on price but are committed to maintaining supplier continuity. "They work with you to arrive at a compititive price, and they are willing to pay because they want long-term partnering," said cari code a vicepresdent at Erine Green Industries. "they [Honda and Tyota] want suppliers to make enough money to stay in business, grow, and bring them innovation." The Big Three's Supply chain models is not much different form the one set by Henry Ford. In 1913, be set up the system of indipendent supplier firms operating at arms length on short-term contracts. One consecquence of thr Big Three's low-price-at-all-costs mentality is that suppliers are reluctant to offer them they cutting-edge technology out of fear the contract will be resourced before the research and development costs are recouped. Contrast the Japanese supply chain model with that of Big Three. Why might asupplier prefer the Japanese model? What benefits might accure to the Big Three by adopting the supply chain practices? Source: Robert Sherefkin and Amy Wilson, "suppliers Perfer Japanese Business Model," Rubber and Plastics News, March 17, 2003, Vol. 24, No. 11