Procurement

In 2018, Porsche once again increased the number of new vehicle deliveries to a total of 256,255 vehicles. Procurement made a ­significant contribution to this success: based on a very close partnership relationship with the supplier industry, it ensured a reliable ­supply of high-quality components for the long term. In the reporting year, Procurement ­focussed particularly on strategically important products and topics relating to optimising the value chain. The supplier network was able to be further intensified and collaboration across company boundaries increased.

For the future, Porsche aims to make greater use of strategic partnerships. As part of that shift, conventional contracts will no longer be the only form of collaboration with suppliers. Porsche will also secure sustainable access to innovative technologies and products by means of new, intelligent partnership models that are already in the works. Digitalisation also played a major role in the reporting year. Procurement pursued innovative ideas to create a series of new apps that were ultimately used across different departments.

Procurement of production material and non-production material
As in recent years, material cost per vehicle was further optimised in the reporting year. Drawing on the strength of close cooperative relationships, Porsche involved its business partners in the optimisation process at an ­early stage by holding product and cost workshops. This approach allowed substantial ­improvements to be achieved.

In 2018, the material outlays of Porsche AG amounted to 4,201 million euros (financial year 2017: 4,985 million euros). Procurement also played a substantial role in helping the company meet its objectives in terms of services and non-production materials as well. In terms of investments, their volume totalled 1,858 million euros in the year under review. The growth compared to financial year 2017 (1,684 million euros) was due primarily to the large number of infrastructure projects geared toward securing continued growth and future competitiveness of the company.

Model start-ups
For Procurement, the production start-ups of the new 911 and the Macan successor were the main focus in the reporting year. Preparations for making a start on e-mobility with the Taycan in 2019 were also well under way. ­Procurement also purchased a multitude of parts for all new products and led the vehicles – hand-in-glove with Development, Quality Assurance, Production and suppliers – to ­production maturity. Beyond the ongoing ­improvements to the vehicles, increasing digitalisation and connectivity also played an ­important role. This resulted in new tasks for the Procurement department.

Strategy 2025
Procurement derives four strategic objectives from the Porsche Strategy 2025 and global trends in the markets. First: top quality at competitive conditions by means of pro-active design of technical and environmental inno­vations. Second: efficiency throughout the ­entire service life of the products. Third: reliability based on continuous availability and ­consistently high quality of purchased parts as well as stable, efficient flows of goods. Fourth: increasing attractiveness as an employer for talented young prospects, and ensuring high job satisfaction among the workforce by ­creating optimal working conditions.

As part of the strategic initiative, Procurement implemented a series of projects in the reporting year. The exchange of information with suppliers was further intensified and the commitment to sustainability more firmly anchored in the supply chain. Procurement marketing was also expanded in order to generate interest in the complex field among students, recent graduates and professionals. This included collaborations with universities such as the University of Mannheim. The practice allows Porsche employees to gain new insights into specific topics, while students get a better sense of the company’s work through excursions, presentations and practical experience.

Innovation management
Porsche operates in an environment that is shaped by rapid change. The advance of globalisation, demanding customers, intensified competition for time and knowledge, opposing modes of thinking and working in the IT and automotive industries are just a few of the challenges facing the company. To identify trends and developments in good time, Porsche also continually sources new ideas from the supplier sector.

The “Porsche Supplier Innovation Days” provide the framework for integrating groundbreaking concepts from suppliers into the company’s operations as quickly as possible. The Procurement and Development Innovation Management team invited suppliers to engage with the theme of “alternative materials and lightweight construction” in the reporting year: ­selected suppliers presented their innovative production concepts to Porsche experts from a variety of specialist disciplines.

In the run-up to Innovation Day as well, which was dedicated to the theme of “well-being in a Porsche vehicle”, the Procurement, Development and Sales departments contacted a ­targeted group of suppliers and start-ups and asked them to submit their new developments as part of an open innovation approach. The more than 200 innovation ideas that were submitted were evaluated by interdisciplinary teams at Porsche. Ultimately 60 “well-being innovations” were selected for presentation by suppliers and start-ups from around the world at the Development Centre in Weissach.

At “Porsche Supplier Tech Day”, the sports car manufacturer was a guest at the home of the world’s second-largest automotive sup­plier, ZF Friedrichshafen AG. The Innovation Management team at Procurement and ­Chassis Pre-Development invited participants to attend presentations and technical talks and share experiences. Subject: What are the latest innovations by the Porsche suppliers and how can Porsche implement them? The highly promising series of “Porsche Supplier Innovation Days” will be expanded further in the future.

Workshops on the subject of sustainability
Sustainability plays a very important role in the supply chain as well – and its importance ­continues to grow. Procurement has been grappling with all aspects of the subject quite intensively for some time now, and has implemented multiple strategic projects in the field. For example, in the reporting year, Porsche ­developed a new concept for supplier workshops to further intensify the exchange with business partners on the topic of sustainability. Working together, approaches to implementing different aspects of sustainability were identified and potential areas for further collaboration defined. Supplier audits to ensure compliance with sustainability requirements are already being carried out. They are the foundation for long-term partnerships.

Sustainability rating
Porsche Procurement strictly enforces supplier compliance with all requirements in relation to sustainability. In the reporting year, a ­concept was developed to ensure aspects of ­sustainability are already incorporated and factored into the tendering process. In addition to the existing contract award ratings for ­quality, development and logistics, Porsche will also soon introduce a sustainability rating for all suppliers. The business partners have ­already been informed of this new requirement. This additional step will allow potential risks in the supply chain to be avoided before deciding which business partner to choose. Suppliers that fail to adequately fulfil the sustainability requirements will be asked to implement pro-active improvement measures to ensure they remain in the running as potential ­business partners.