Death of the sales director

There are rich pickings to be won by innovative, service-orientated British suppliers to car makers. Competition is growing among suppliers as the automotive industry expands globally and UK-based car makers plan to boost production. But many suppliers will have to reassess their relationship with their customers to survive and succeed. The traditional links between the […]

There are rich pickings to be won by innovative, service-orientated British suppliers to car makers. Competition is growing among suppliers as the automotive industry expands globally and UK-based car makers plan to boost production.

But many suppliers will have to reassess their relationship with their customers to survive and succeed. The traditional links between the car makers’ purchasing and supplier sales staff are close to breaking point.

Increasingly, first and second tier automotive manufacturers are coming under pressure from the big car makers, which are demanding much more from their suppliers.

Once, a supplier was simply expected to provide mass-produced components at the lowest cost according to drawings and specifications supplied by the car maker. Now customers want suppliers to provide complete systems designing and prototyping a steering system before production, for example on time and on budget.

Deadlines are getting shorter; there is no time to correct mistakes. But rewards are greater too. A contract for a leading car maker can be worth £5m a year for five or 10 years.

Differentiation has become the watchword for UK automotive component makers as they strive to provide this improved service. They are struggling against European suppliers to maintain their share of the big manufacturers’ budgets. Rover and Vauxhall have recently signalled their intent to source more components from Europe.

Every opportunity to outsource is being considered by car makers. The services affected include design, development, styling, performance testing, market research, market intelligence gathering, prototype building, sub-assembly manufacturing, manufacturing and marketing.

As customers seek suppliers that can provide right-first-time solutions and manage complex programmes on time and within budget, the traditional sales director role is becoming redundant. Instead, the multi-skilled programme manager is set to help UK suppliers capitalise on the new market opportunities.

Suppliers that regard programme management as an overhead will suffer. Such firms run their business functionally and sequentially, passing information from the sales team to the engineering department, to production and, finally, to logistics.

In these companies, the sales director’s job is done when the sale is made. The programme manager is likely to be a non-graduate engineer who has risen through the ranks, well-liked but with low status and not skilled in commercial issues or negotiations. He will typically be seen as a progress-chaser and paid less than a draughtsman. If things start to go wrong he will not have the skills or the clout to put them right.

Suppliers that allow the sales team to run their business will soon hit problems with their customers. They will overspend on programmes and fail to deliver them on time.

Successful suppliers will be those that adopt a more integrated approach to customers, led by a single programme manager responsible for establishing cross-functional teams, encouraging parallel working and managing all aspects of product development, service and supply.

The programme manager will be highly paid and highly qualified an engineering graduate from a good university, trained with a blue-chip company, who probably took a part-time MBA and moved jobs two or three times. He or she will have the skills to assign and manage resource input to the project, and will be able to see potential problems before they become serious.

Such a manager will have the clout to go to the engineering director and demand extra resources to fix problems. He will be able to inspire trust so that the customer believes him when he says he can deliver the project on time and to budget.

Customers are seeking the kind of one-to-one, reliable service provided by the programme manager who comes up with the solution to meet their needs. To succeed, UK suppliers will need to recognise that sales staff are an overhead to their business that they can no longer afford.

Gary Turner is an automotive supply chain and manufacturing specialist at PricewaterhouseCoopers.