Applying as a new supplier of PSA Group

The route to become a new supplier of PSA Group is very structured, as for any other major car manufacturer. However, as devil is in the details, it is better to be aware of the processes to maximise your chances. The merger in January 2021 of PSA Group with FCA (Fiat Chrysler), named Stellantis, will most probably lead to common customer specific requirements, after the convergence of processes and IT systems of both parties is completed.

You will see below which route to follow to become a supplier of PSA Group and 3 key factors to make your company desirable

 

Registrer as a candidate on PSA Group’s B2B Supplier Portal

The first step is to register on PSA Group’s B2B Portal. As a new candidate willing to work with PSA Group, you are invited to introduce your company. You will have to select the type of commodities or services you want to offer and chose the corresponding purchasing department. Your application from will be forwarded to the purchaser who will evaluate the potential interest of your company.

This is an important step which must be carefully prepared. Once sent to the purchasing department, your company presentation cannot be changed. This is the reason why I strongly recommend doing a market study before registration on the B2B portal. A local French partner who has experience and network connections in the French automotive industry is an efficient solution to be accurate and save time.

 

Get your IATF 16949 certification

It is a must to be certified according to the international automotive standard IATF 16949 (part of ISO 9001 with a focus on defect prevention and continuous improvement) which guaranty that the supplier, throughout its complete supply chain, has the proper quality management system to master the final quality of its supplies (https://en.wikipedia.org/wiki/IATF_16949).

A company could however be nominated without IATF certification provided it has a plan to achieve the certification of its manufacturing plant before the start of mass production. PSA Group will grant a waiver (exemption) to a supplier whose quality management system is considered to be compliant with IATF standard. Within IATF 16949, car manufacturers may express specific requirements – the so-called CSR (Customer Specific Requirements). You can easily upload PSA Group’s CSR from IATF website (www.iatfglobaloversight.org/oem-requirements/customer-specific-requirements/).

You have now registered on PSA Group B2B portal, your products or services are of interest and you received a Request For Information (RFI). This is a mock invitation to tender designed to evaluate your ability to answer, and your price level. Here again, the support of a French local partner is an advantage. You are now starting your business development activities, which consist in lobbying, lobbying, lobbying all stakeholders – R&D, laboratory, project, purchasing, quality. Your main target is to make your solution desirable.

The problems to overcome are many, among which: obtain a technical release based on PSA Group specific requirements and test methods, get support from your internal teams, based out of France, and disconcerted by these unusual expectations.

 

Don’t ignore the cultural gap with French customers

The main difficulty to overcome for a nonFrench supplier is the cultural gap. Although we are talking about industry giants, with worldwide organisations, the roots are in France, and so are most of the supporting teams. Such giants are in constant reorganisation to optimise their worldwide resources and their workflow. Some suppliers are impregnated by their home industrial culture and used since decades to work according to their national industrial customers. This is the case for the German automotive suppliers. Despite France is the country next door, the rules and habits are different. In addition to this cultural gap, the moving environment of organisations make it difficult for the car manufacturer itself to support you.

For example, PSA Group has taken over Opel in 2017. Some engineering departments have been transferred to the German HQ, in Rüsselsheim. The German teams have been required to implement at once PSA’s organisation and technical specifications; they needed here the support from their French colleagues, which were sometimes no longer available. This is a very typical example of a national organisation moving to an international organisation.

Consequently, suppliers have to structure their organisation accordingly and onboard people able to work with several foreign languages, with teams based in several countries, themselves sometimes not experienced with the systems and procedures.

 

Follow PSA Group’s QIP framework: 3 audits

You are now determined to get a first business with PSA Group: you must follow the certification route. PSA Group, or a certified service partner, will carry out a serie of audits and check thoroughly the ability of the new supplier to meet PSA’s requirements.

  1. The first audit is named ‘NSA ‘ (New Supplier Audit): it is the entry door to be nominated as a supplier for a first business. It is carried out by a certified service partner for 1.5 day and is valid for 18 months.
  2. The second audit is named ‘PCPA (Part Controlling Process Audit): it is carried out during the project development phase; the auditor is checking that the supplier’s R&D processes consider the quality targets.
  3. The third audit is the final certification for serial production, named “QSB+” (Quality Standard Basic), granted for a limited period (4 years) to the manufacturing plant.

These audits are milestones marking out the path to the the final approval. They are evaluating the suppliers’ industrial performance and quality throughout the product lifecycle. PSA Group has a worldwide evaluation framework called “QIP” for Quality and Industrial Performance. This QIP framework is regularly updated (beginning 2021: V4).

Before being invited to start the QIP qualification process, you must consider with the highest objectivity your ability to be eligible. There are several factors that may combine: size of your business, strategic interest for your solution, global footprint, sales, quality and R&D resources, ideally a window person or team in France.

And finally, ensure the commitment of the company’s management to support the project. As a matter of fact, this last factor is determining: the time and resources required to enter the French automotive industry – a foreign market with a high level of technical requirements – are often underestimated.

Key factors to make your product or service desirable

If some factors are obvious, such as having the latest IATF certification, others are more subtle. Let us review them.

  1. Key factor N°1: your global footprint.

    The automotive industry is highly advanced in the search for scale economies. Organisations based on industrial platforms are deemed to this objective. The logic of a platform is to focus on a given car segment, often linked to an engine or propulsion type. New vehicles created within a platform share common equipment, mainly the engine and the gearbox. The new vehicle is launched either simultaneously, or sequentially in several factories across the world; it all depends on the car maker marketing strategy. A platform will give birth to several vehicles, which may be named according to the local brand (for example, General Motors was selling the same car under the brand Opel in Germany, and Vauxhall in the UK).

    Consequently, suppliers with a large global footprint – either through their own subsidiaries, or local partners – have more opportunities. They will be able to supply the car manufacturer, or their Tiers one at the doorstep of their local factory.

  2. Key factor N°2: innovative solutions

    Being aware of the car manufacturer’s actual issues is a good way to raise interest. For example, if the perceived quality of the car seats is poor, the first impression of a client seating in a new car at the dealer could be a deception, then a lost sale. The car manufacturer will raise a task force to improve this specific point. If you, supplier, have a solution enhancing the perceived quality of the seat, you increase your business opportunities. A regular lobbying and close personal relationship with the car manufacturer’s design, quality and technical teams will make this information come to your ears.

  3. Key factor N°3: your price offer

    I intentionally noted this key factor in third position. It all depends on your strategy and marketing positioning. Does your product or service provide an answer to a major quality issue, or to the future brand’s strategy? Then your price is not your Unique Selling Point.  On the contrary, you just built a new plant, close to PSA local factory, with a super optimised manufacturing process for a commodity. Then your price is your Unique Selling Point. There is no rocket science behind prices, just a common sense a a good knowledge of your competitors.

Conclusion

Becoming a supplier of PSA Group, and by extension of Stellantis, offer huge business opportunities with almost 9 million vehicles sold yearly in the world. Register on the B2B supplier portal and follow the QIP framework is a well-marked path. The most difficult is to handle the cultural gap, to lobby constantly in the field and to dedicate skilled resources to support your local business development team over time.

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