Porsche 2005 Annual Report Download - page 89

87
Purchasing
Efficient procurement processes and
stable partnerships with suppliers are
factors in Porsche’s success.
The start of series production for the new models and the de-
cision in favor of a fourth model series represented a challang-
ing situation for Purchasing in the 2005/06 fiscal year. Even at
this early stage of the Panamera’s development, the structures
for production must be established and suppliers selected. In
this manner, Porsche makes sure that the suppliers’ know-how
and technical capabilities can be absorbed into the Panamera
concept.
Criteria for selecting suppliers not only constitute demand-
ing cost targets but also place exacting requirements in terms
of quality and technology. Porsche will be drawing on both
known, highly competent partners and new, innovative sup-
pliers with convincing product concepts. Purchasing, develop-
ment, logistics and quality assurance work together to pro-
duce a comprehensive profile of potential partners. Porsche
will be entering into long-term cooperation with suppliers
selected in this way.
Dynamic Raw Materials Markets
Like the rest of the sector, Porsche had to face massive price
increases in metal and fossil raw materials in the review year.
In particular, the prices of precious metals such as platinum,
palladium and rhodium increased dramatically. Energy costs
also increased significantly in the last two quarters of the
2005/06 fiscal year.
Purchasing responded to this negative development with ap-
propriate measures, first to ensure the dependability of sup-
plies and, second, to optimize materials costs. These objec-
tives were achieved and significant savings made in materials
costs, which largely offset the price increases in raw materials.
Suppliers played an important part in this by presenting on-
going alternatives for optimizing both their products and manu-
facturing processes.
Developing the Supplier Base
Given the high external added value, efficient procurement
processes and stable partnerships with suppliers are key suc-
cess factors for Porsche. For this reason, the further de-
velopment and improvement of internal purchasing processes
and structures is crucial.
One result of these optimization measures is the “Supplier
Management” unit set up in the review year. Its core tasks con-
cern the systematic optimization of the supplier base and
management of developments to be undertaken by individual
suppliers. Experienced experts from various business areas
solved quality, capacity and cost problems in collaboration
with the suppliers. Within a short period, numerous improve-
ments of benefit to both Porsche and the suppliers themselves
were introduced.
By using special sensors in the development and production
processes, it is possible to identify any difficulties systema-
tically and in good time. This not only remedies problems but
also enables a preventive approach to potential problems.
Qualification and training measures, for example, are under-
taken during product development before series production
gets underway. Porsche regards this as a further, essential
component in its partnership with the suppliers.
The successes of “Supplier Management” are confirmed by
the results of regular supplier assessments and automobile
quality. In the review year, a number of suppliers achieved
better results in terms of quality, delivery service and cost
management. This translates into a continued overall improve-
ment in the partners’ performance.
For monitoring the suppliers’ financial stability, risk manage-
ment was optimized by the introduction of an improved range
of instruments for identifying risks. Ongoing monitoring and
analysis of the suppliers’ financial capacity means that finan-
cial problems can be identified in good time and enables the
partners to find solutions. This minimizes adverse effects on
Porsche’s production.
More Efficient Procurement Processes
In the review year, optimization measures were supplemented
by a project intended to improve procurement processes.
The objective is to optimize communication with the suppliers
and to integrate them more fully into the product development
processes. The systematic and reciprocal exchange of infor-
mation speeds up operational procurement procedures. Since
the project supports the purchasing not only of production
materials but also of other products, it represents an impor-
tant step toward a unified improvement of activities in the
purchasing department. Moreover, it offers the opportunity to
construct a new integrated information system that provides
a comprehensive and transparent picture of the suppliers.
As in previous business years, Porsche will continue to analyze
processes and utilize identified potential to optimize purchas-
ing procedures.