How procurement at Porsche ‘developed expertise in forward sourcing’

Posted by Sino SCS

Porsche is looking to increase its collaboration with manufacturers and suppliers down the tiers to generate in-house expertise and secure long-term supplies.

Barbara Frenkel, member of the executive board for procurement at Porsche AG, said automotive supply chains need to become more “forward-thinking” after global semiconductor shortages caused automotive factories to halt production. 

In an interview she said: “The entire value-added network will have to be even more forward-thinking in the future. We want a supply chain that is as resilient as possible without any one-sided dependencies. To do that, we need innovative partners in the world’s regions. Especially the ones where we sell our vehicles.”

The automotive giant has implemented a “forward sourcing” model to secure semiconductors, Frenkel said. 

“Development and procurement are as close as can be. One example of this is our ‘forward sourcing’, for example in the case of semiconductors. We’ve developed a lot of expertise in this area.”

She said the semiconductor shortage “has really tested us”, and Porsche is looking to ensure future supplies by increasing collaboration and communication with manufacturers to gain greater control of its supply chain, and by generating direct contact with suppliers down the tiers. 

Porsche said while it was not looking to bring chip production in house, it aimed to build internal expertise and develop chips jointly with semiconductor manufacturers. 

Frenkel said: “We now have direct relationships with the major semiconductor manufacturers. We now have a better understanding of the complex supply chains and the logic of this industry. One thing is clear: the automotive industry only has a share of around 12% of the global semiconductor market. 

“We are not exactly at the top of the list of priorities for many of the chip manufacturers. In the future, we intend to expand our contact with manufacturers. The idea is to deepen mutual understanding, to achieve more dependability in the relationships. We also want to work together on new technologies.”

Peter Schäfer, CEO of Porsche Engineering, said collaboration between procurement and other business departments was “critical” for success. 

Schäfer said: “This is the great opportunity and potential that a very good and close collaboration between procurement and development brings. This is particularly important because the transformation of our industry is in full swing, and this is the only way to ensure that we are able to plan strategically for the long term and remain agile and flexible at the same time.”

Author Sino SCS
中品供应链-Sino Supply Chain Service