Untangling the supply chain – how Fiat Chrysler Automobiles engages with suppliers

Todd Yaney describes how FCA US has developed its supplier engagement strategy, providing opportunities for mentoring and best-practice sharing across its supply chain.

Although industries like to imagine their supply chains as neat and orderly organization charts, the reality is that more often they are tangled, fluid, and full of potential for the unexpected.  Many companies have been impacted by a negative event, only to discover that it occurred at a sub-tier company that they were not even aware was part of their supply chain.

One way FCA US, a member of the Fiat Chrysler Automobiles N.V. (FCA) family of companies, addresses this uncertainty is through our Supplier Sustainability Panel.  This forum was created several years ago to engage a cross section of suppliers, chosen to represent all commodity groups, company sizes, and varying levels of expertise in sustainability.  The Panel addresses current and emerging issues, shares best practices and develops messaging and solutions that can be modeled and then disbursed throughout the FCA US supply base.  The influence of this work is multiplied across the automotive supply chain due to the considerable overlap of suppliers among automakers.

The Panel also serves as a test platform for training and new tools, while inviting valuable input from all corners of the automotive supply chain.  The meetings are sometimes hosted by suppliers, allowing them to showcase particular success stories. Subject matter experts from the supplier companies can join online from various regions or offices, contributing to dedicated sessions aimed at specific topics such as supply chain risk management or particular engagement opportunities.

A key focus of the Panel since its inception has been to instill the message that operating responsibly and sustainably is good for suppliers’ business, an approach that benefits every tier.  The immediate customer of each tier in the supply chain is often the one best positioned to influence their supplier toward the adoption of sustainable operating principles. The Panel helps FCA US reach through the many layers of the supply chain to communicate the value of operating responsibly and sustainably.

A particular strength of the Panel is that it provides experts for our peer-to-peer mentoring program.  Under the program, suppliers can ask for help with sustainability issues such as creating a supplier code of conduct or teaching employees about sustainability.  They are introduced to a Panel member who has been successful in that aspect and who then provides guidance on closing gaps.  Since the conversations are taking place without the involvement of competitors or customers, suppliers still learning about the value of transparency in sustainability can be more forthright and candid.  Suppliers will report back to FCA US about specific gaps that have been closed – a success story that is then shared with the FCA US buyers for both suppliers. In this manner, best practices can be shared while also preserving confidentiality.

In 2016 we changed the structure of the Supplier Sustainability Panel to expand its influence and potential impact.  FCA US Purchasing and Supplier Quality convenes a forum of top strategic suppliers called the Supplier Advisory Council (SAC), into which the Panel is now incorporated. The SAC includes the most senior executives from approximately 20 key suppliers, who meet regularly to address strategic issues.

Engagement is strengthened due to the senior-level participation of the SAC, which helps to foster top-down endorsement. It also demonstrates the increasing integration of sustainability into our core business, rather than as a standalone initiative.  The change also creates a focused sustainability network for the member companies in which their sustainability experts can connect with industry peers.

After interviewing each company to identify common risks and concerns as well as the strengths that each one brings, FCA US has begun working with the Panel members to create several initiatives for use throughout the supply chain, including sub-tier suppliers.  This vital stakeholder engagement continues to provide much-needed access to those companies that are a challenge to reach and yet have significant potential to heighten their sustainability awareness.

Todd Yaney is part of the sustainability team for FCA US, a member of the Fiat Chrysler Automobiles N.V. (FCA) family of companies. His responsibility includes supply chain sustainability, which allows him to work closely with suppliers who range from expert level in sustainability to those who are just starting to learn its value in their operations.  Closing that gap presents challenges and rewards unique in his 30 years with the company, most of which has been spent engaging with suppliers.