THE QUIET REVOLUTION
DHL Resilience 360 monitoring thousands of parts and inputs from a large number of suppliers . Historically , the bargaining power of suppliers was very low with the OEMs setting the rules , stipulating component designs and generally controlling the game . This is changing . Auto suppliers ’ contribution to vehicle make-up has increased from 56 percent in 1985 to around 82 percent today . This has led to the formation of ‘ mega suppliers ’ i . e . large suppliers that control an ever-growing portion of the supply stream through acquisition and vertical integration .
In this new paradigm , suppliers spend more on R & D than OEMs . For example Bosch , the largest supplier globally , spent 9.9 percent of its sales on R & D in 2013 . In contrast , General Motors spent 3.5 percent of its sales on R & D . Suppliers are also bringing upstream product capabilities into their fold by forming new partnerships
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