The influence of the VW Group as a parent company

Bentley Motors: Outsourcing

Philip Cox UID: 082653023/11/12

Philip Cox UID: 0826530SCM: Outsourcing

Bentley Motors

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VisionBentley Motors the definitive British luxury car company, dedicated to developing and crafting the world’s most desirable high performance cars.

Bentley Continental GT released

Philip Cox UID: 0826530SCM: Outsourcing

Inside out approach

Strategic outsourcing: sub-assemblies which offer least added-value to the customer [1]

Tactics: take advantage of VW’s economies of scale

VW Group vertically integrate (buy-out suppliers and set-up sub assembly plants)

Bentley Motors: Outsourcing StrategyAxle Component Suppliers

VW Braunschweig (Axle Sub-Assembly)

Bentley Production Line Crewe

Philip Cox UID: 0826530SCM: Outsourcing

Luxury customer features and personalisation

Seen by VW Group as a centre of excellence for interior quality and craftsmanship

Specialising in bespoke, hand-crafted wood and leather interiors

Largest producer of 12-cylinder powertrains [2]

Variable displacement / Cylinder de-activation implementation

Bentley Motors: Core Competences

Philip Cox UID: 0826530SCM: Outsourcing

High AddedValue

Low AddedValue

Least UsedMaterial

Most UsedMaterial

Familiarity with Material

Proc

ess

Make vs. Buy Decision Matrix [2]

Continental GT

Interior Trim

Axle Assembly

Infotainment

Buy-in

Depends on strategic significance In-house

Depends on investment

Body Structures

Philip Cox UID: 0826530SCM: Outsourcing

Risks to Bentley

Leading in manufacturing innovation offers greater competitive advantage as this is harder for competitors to copy than purely technical or product innovation [3]

Manufacturing Expertise

Brand Reputation

Manufacturing Flexibility

Socio-economic

Implications

Attractiveness of Account

Philip Cox UID: 0826530SCM: Outsourcing

Focusing on business core competences of interior quality and craftsmanship Less likelihood of having Bentley developed platforms

Outsourcing of vehicle assembly with product range extended? Brand values built around having Crewe as the home of

Bentley’s manufacturing

Follow VW’s move towards a modular platform strategy, and higher levels of global sourcing of major components VW are looking to implement a C3 Sourcing Strategy

(Cost Competitive Countries) [6]

Recommendations for the future….

Philip Cox UID: 0826530SCM: Outsourcing

References[1] Sharpe, D; 2012; ES4C9 Supply Chain Management- Lecture 6: Outsourcing. University of Warwick

[2] Finlay, S; 2012. Big Engine Builder Bentley Thinks Smaller. Wards Auto Available at: http://wardsauto.com/retail/big-engine-builder-bentley-thinks-smaller [Accessed: 20/11/12]

[3] Quinn, J and Hilmer, F; Strategic Outsourcing (Sloan Management Review, 1994)

[4] Lifestyle Lounge; 2012. Pros and Cons of Outsourcing. Available at: http://lifestyle.iloveindia.com/lounge/pros-and-cons-of-outsourcing-10665.html [Accessed: 20/11/12]

[5] Bowser, C; ES4C9 Supply Chain Management - Lecture 7: Supplier Selection. University of Warwick

[6] Day, J; 2009. Supplier Business analyzes VW production / purchasing plans. Automotive Electronic News. Available at: http://johndayautomotivelectronics.com/?p=1207 [Accessed: 20/11/12]

ResourcesWan, M; 2011. Bentley. Autozine. Available at: http://www.autozine.org/Manufacturer/UK/Bentley.html [Accessed: 18/11/12]

Investopedia; 2009. Definition of Core Competencies. Available at: http://www.investopedia.com/terms/c/core_competencies.asp#axzz2CtReTS7D [Accessed 20/11/12]

Scott, S. Bentley Motors - Chassis Engineering Axle Team Senior Engineer

Brightmore, B. Bentley Motors - Chassis Engineering Logistics Co-ordinator

Philip Cox UID: 0826530SCM: Outsourcing

Thank you for listening.Are there any questions?

Philip Cox UID: 0826530SCM: Outsourcing

1/3 of the volume of the Continental model line

Far less out sourcing of major sub-assemblies

Bentley designed and developed platform and body structure

Axle assemblies and bodies are manufactured on-site at Crewe

6.75L V8 has been a long standing Bentley development

Bentley MulsanneBACK-UP

Philip Cox UID: 0826530SCM: Outsourcing

Bentley Continental Access to VW’s D1-platform

Typical of automotive industry with outsourcing of major subassemblies Body structure (VW Zwichau, Mosel) Front and Rear axle assemblies (VW

Braunschweig, Glauchau) Powertrain (V8T+ models)

Vertical integration with VW owning many of their sub-assemblers Improved collaboration and volume

planning

Platform shared with VW Phaeton, with Bentley’s volumes originally making up excess capacity

BACK-UP

Philip Cox UID: 0826530SCM: Outsourcing

High AddedValue

Low AddedValue

Least UsedMaterial

Most UsedMaterial

Familiarity with Material

Proc

ess

Make vs. Buy Decision Matrix [2]

Continental GT

Mulsanne

Interior Trim

Interior Trim

Axle Assembly Axle Assembly

Infotainment

Infotainment

BACK-UP

Philip Cox UID: 0826530SCM: Outsourcing

Steele and Court (1996 p. 69)

Nurture clientExpand businessSeek new opportunities

Cosset clientDefend rigorouslyHigh service &response

Give low attentionLow interestLose without pain

Drive premium priceSeek short-term advantageRisk losing customer

Development Core

Nuisance Exploitable

Attractiveness of account

Relative value ofbusiness or account

Attractiveness of Bentley’s Account [5]BACK-UP