How to Avoid the 5 Most Common Problems in Hiring Automotive Subcontractors
While the modern automotive industry may have started with manufacturers producing all of their parts in-house, today’s car makers source nearly every material that goes into a car from subcontractors to suppliers. You may have to buy your upholstery fabrics and have your differential gears heat treated by subcontractors, but that doesn’t mean you have to settle for quality issues or delays. Make sure you’re working with only the best automotive subcontractors by applying these five tips during the sourcing process.
1. Don’t Eliminate Quality Control
When it comes to ordering parts and having materials processed by subcontractors, quality control remains your responsibility as the manufacturer, mechanic or seller of aftermarket supplies. Your customers will expect you to take responsibility for problems caused by manufacturing flaws or defects, and the contract with your supplier likely limits their liability. Make sure to retain your quality control crew for spot checks at the very least. Routine quality checks are necessary even after years of working with the same subcontractor since conditions can always change on their side.
2. Try a Pre-Qualifying Service
Automotive parts and services are often ordered in a rush due to last minute changes or responses to a recall. Having the right subcontractors already on hand is rare, so it becomes a challenge finding a supplier as quickly as possible while still looking into their qualifications and background. A pre-qualification service handles this work for you and returns a rating on a supplier’s suitability faster than you can come up with on your own. Find a pre-qualification service specializing in automotive suppliers and subcontractors to get the best results from their reports.
3. Differentiate Between Outsourcing and Subcontracting
Are you concerned about the public relations impact of working with contractors from outside your own country or local area? While this isn’t a big deal in many cultures, companies in the U.S. and many parts of Europe have faced criticisms from consumers for what’s seen as moving jobs out of the country. If this is a concern for your company, make sure your subcontracting agreements clearly delineate your involvement with your suppliers. You can counter claim that you’re attempting to outsource work by highlighting these clauses and showing the limited nature of your relationship with a supplier.
4. Prepare to Make a Long-Term Commitment
Many of the best European automotive subcontractors are located in countries where car manufacturing has reduced. This causes manufacturers to shift their focus from internal production to exports, but it also means they’re looking for more stable and long-term agreements to keep their businesses running. You may have to negotiate longer contract terms in order to develop connections with the most experienced companies and those that offer the best rates. A two-, three- or even five-year supplier agreement is worth gaining access to a new and reliable partner.
5. Turn to Negotiating Consultants
In complex sourcing and procurement situations, don’t be afraid to hire third-party negotiation consultants to work out the details on your behalf. This is especially helpful when there’s a language barrier making contract negotiations difficult for both sides. Experienced contract negotiators settle disagreements and notify all parties with professional translated material to make sure everyone’s on the same page before signing anything.
Ready to make contact with automotive subcontractors looking for new contacts? The European Subcontracting Network allows you to choose your industry, category, specific service, and more to find the exact supplier you need.