Porsche 2010 Annual Report Download - page 68

Group management report
Procurement
In the short fiscal year 2010, the cost of ma-
terials within the Porsche Zwischenholding GmbH
group totaled 2,267 million euro. As a result of nume-
rous measures aimed at optimizing products and
processes and implemented jointly with suppliers, it
was possible to reduce the cost of materials per
vehicle, as in previous years. Following the conclusion
of several large-scale projects from the prior fiscal
year, the volume of procurement of non-production
materials and services during the short fiscal year
was down on the comparative period of the prior year.
Gradual expansion of collaboration with VW
In the past short fiscal year, joint procure-
ment with Volkswagen in the areas of production and
non-production materials was stepped up on the basis
of the master cooperation agreement concluded in
the prior fiscal year. The procurement volumes of
both companies were pooled for defined volumes that
offer potential synergies. In addition, the global procu-
rement organization of the Volkswagen group was
leveraged. This has delivered sustainable effects on
the cost of materials for Porsche AG. Going forward,
it is planned to gradually extend joint procurement of
production materials and non-production materials.
This will positively impact the cost of materials, parti-
cularly for new vehicle projects.
In light of the high proportion of value added
by third parties, the performance and stability of the
supplier base will continue to play a key role under
the new conditions.
Production supplies secured at Porsche despite
tough conditions
While the automotive supply industry conti-
nued to face the ongoing effects of the worldwide
financial and economic crisis during the first half of
2010, the economy recovered significantly in the
second half of the year. However, the rapid recovery
of parts of the world economy led to capacity bottle-
necks and increased financing requirements. The
extremely cautious lending policy of the banks and
rising refinancing costs continue to have a critical
impact. Despite this difficult situation, Porsche colla-
borated successfully with suppliers to identify poten-
tial weaknesses at an early stage and improve suppli-
ers’ financial stability. This was achieved by systema-
tically leveraging Porsche’s risk management system.
As a result, 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, while significantly
increasing production figures.
In view of the uncertainty regarding the deve-
lopment of the global financial crisis, and the high
proportion of value added by third parties, the effi-
ciency of suppliers’ production processes and the
competitiveness of their cost structures were more
important than ever. Throughout the reporting period,
supplier management therefore worked hand in hand
with suppliers to enhance their value-added processes.
Key tasks included providing suppliers with support to
safeguard the start-up of new vehicle projects and
implementing preventive measures to ensure trouble-
free series development.
The performance of Porsche suppliers is re-
gularly evaluated. As in the prior fiscal year, the re-
sults of these evaluations confirmed the high perfor-
mance of the supplier base in ongoing series produc-
tion; however, results in the product creation process
revealed scope for improvement.
Supplier selection at Porsche
The start-ups of the 911 Carrera Speedster
and Carrera GTS models marked two significant
milestones for Porsche’s procurement processes.
The kick-off of series development for the 918
Spyder, which integrates plug-in hybrid technology,
represents a further major advance in the develop-
ment of Porsche’s hybrid expertise. Selecting
suppliers for this model posed particular issues for
procurement, as the vehicle combines typical racing
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