“We see the need on our supplier base to transform their business and we are supporting them”

AutoRevista.- What are the requirements and approval criteria for suppliers of the different links in the value chain in this era of transformation towards a more digital and sustainable industry?

Eliseo Rozas.- ZF has a standard set of requirements for approval of new suppliers or new manufacturing plants of existing suppliers. They have to accept our ZF global purchasing terms and conditions as well as several quality and logistic directives, the ZF business partner principles and sustainability requirements. Furthermore, certificates for quality and environmental management and a certificate relating to the Trusted Information Security Assessment Exchange (TISAX) need to be provided. ZF also request suppliers to be onboarded on SupplyOn as collaborative platform for Electronic Data Interchange in several areas. The requirements in terms of a Responsible Supply Chain (RSC), cybersecurity requirements and electronic communication are integral part of our day-to-day business.

AR.- How is the relationship between customer and supplier evolving, especially in innovation, to achieve higher and better levels of partnership?

E.R.- The transformation of the industry – especially with respect to e-mobility or Advanced Driver Assistant Systems – is changing our customers’ requirements. New products need to be developed to address new functions or new requirements. Innovation plays an extremely important role on it. It is a very dynamic environment. Different technical solutions can solve the new requirements and functions but innovations can become obsolete very quickly or do not achieve a critical mass to become cost competitive. The automotive industry continues to be a very competitive landscape in which design is always in competition with cost. We also see the need on our supplier base to transform their business and we are supporting them 

AR.- Are ZF working on a dynamic focused on creating critical supplier networks closer to production centres?

E.R.- Within the current time of volatility, uncertainty, complexity und ambiguity, the focus is on reducing long-term supply chains, but always with a total cost of ownership in mind. Indeed, we push for closer manufacturing locations in close proximity to our and our customers’ plants. And we aim to attract our key suppliers to support us or getting new supplier onboard. Our goal is always to localize supply where our products are manufactured.

AR.- How are Big Data tools contributing to achieving better levels of efficiency and competitiveness in the joint customer-supplier work?

E.R.- Currently we are ramping up digitalization initiatives that we started several years ago. The digitalization of all purchasing processes is generating a significant amount of information. We also have information more accessible and transparent. But topics like Big Data and Artificial Intelligence it is a long journey. We have begun to harvest some benefits, but we will need more effort and dedication on our side – and on the supplier side. Suppliers who have established similar digital initiatives and that establish transparent digital communication along all the supply chain will have better changes to increase their competitiveness.

AR.- What value does the relationship with automotive clusters or other entities that bring together supplier companies with different profiles add?

E.R.- There are certain topics that can only be approached within a close partnership. Take for example the field of sustainability: If there is no agreement of several companies setting firm standards and systems it is almost unmanageable and extremely costly for individual companies. 

AR.- In the specific case of the European supplier industry, how do you think it should continue to evolve so that Europe remains an attractive region for vehicle manufacturing?

E.R.- The European supplier industry relays on innovation and quality. Cost also matters, and the recent wave of inflation cannot be further absorbed by the market. Some regions have not been exposed to that to that extent or they have been on a lower level. In the foreseeable future digitalization, robotization and Artificial Intelligence should be part of any supplier to drive efficiency. It is also key that the European companies and European Union address the capacity needs in terms of raw material availability that can seriously limit European output and competitiveness.

Additionally, suppliers in Europe should consider sustainability as a ’must have' embedded by design as supply chains become circular. Every business must now be a sustainable business. Companies must pursue improved environmental, social, and governance (ESG) performance by transforming their operations to be circular, net zero and trusted.

Diferentes soluciones técnicas pueden resolver los nuevos requisitos y funciones, pero las innovaciones pueden quedarse obsoletas muy rápidamente o no alcanzar una masa crítica para ser competitivas en costes/ Different technical solutions can solve the new requirements and functions but innovations can become obsolete very quickly or do not achieve a critical mass to become cost competitive

Nuestro objetivo es atraer a nuestros proveedores clave para que nos apoyen o conseguir que se incorporen nuevos proveedores/ And we aim to attract our key suppliers to support us or getting new supplier onboard

Los proveedores europeos deberían considerar la sostenibilidad como un elemento "imprescindible" integrado en el diseño, a medida que las cadenas de suministro se vuelven circulares/ Suppliers in Europe should consider sustainability as a ’must have' embedded by design as supply chains become circular

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Entrevista publicada en AutoRevista 2.380-2.381