Porsche 2009 Annual Report Download - page 71

Procurement
The cost of materials at the Porsche
Zwischenholding GmbH group came to 4,492 million
euro in fiscal 2009/10, up from 3,795 million euro in
the prior year. In the area of production materials, this
increase was mainly due to increased production vol-
ume and a change in the model mix and product sub-
stance.
Porsche hedges risks
Following significant falls in the price of key
commodities in the period up to early 2009, commod-
ity prices are again rising. However, the record level
of 2008 was not matched during the reporting period.
The effects on the company were contained by the
Porsche Zwischenholding GmbH group’s targeted
hedging measures, compensatory measures in other
cost components of production materials and numer-
ous other measures for product and process optimi-
zation implemented jointly with suppliers. Overall ma-
terial costs per vehicle were again reduced during
fiscal year 2009/10.
Following the conclusion of several large-
scale projects from the prior fiscal year, procurement
of non-production materials and services was down on
the prior year.
Collaboration between the investments
In the past fiscal year, the Porsche Zwischen-
holding GmbH group analyzed numerous options for
closer collaboration with Volkswagen. The signing of a
general cooperation agreement marked a significant
milestone in the area of joint procurement. On the ba-
sis of this agreement, potential synergies were identi-
fied some of which have already been achieved. The
goal is to pool the two companies’ procurement for
defined volumes and to benefit from Volkswagen’s
global procurement organization. Accordingly, the
next steps will involve the gradual expansion of joint
procurement in the areas of production materials and
non-production materials.
Production supplies secured at the Porsche
Zwischenholding GmbH group
During the reporting year, the automotive
supply industry had to contend with the effects of the
global financial and economic crisis. This situation
was exacerbated by the very cautious lending policy
of the banks and by rising refinancing costs. The
massive worldwide increase in applications for insol-
vency protection within the automotive supply industry
also affected Porsche’s supplier base. Despite this
critical development, Porsche collaborated success-
fully with suppliers to identify potential weaknesses at
an early stage and improve suppliers’ financial stabil-
ity. This was achieved by the systematic application of
Porsche’s risk management system.
As a result of these preventive efforts, the
number of supplier insolvencies seen by Porsche was
significantly lower than in the industry as a whole.
Even in critical cases, it was possible to avoid long-
term disruption to the reliability and quality of supplies
for vehicle production.
This is further confirmation that the tools de-
ployed to monitor suppliers’ financial stability ensure
timely recognition of supply risks. The financial as-
sessment therefore remains an important criterion for
the selection of suppliers that is firmly integrated into
the award system in the Porsche Zwischenholding
GmbH group. In the new fiscal year, particular atten-
tion will continue to be given to the financial stability
of the supplier base.
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