Outsourcing vs. insourcing in the automotive industry : the role and concepts of suppliers

Nitschke, Christian (2005-03)

Thesis (MBA)--Stellenbosch University 2005.

Some digitised pages may appear illegible due to the condition of the original hard copy

Thesis

ENGLISH ABSTRACT: The research report takes an in-depth look at the automotive industry and their major participants in the upstream value chain. The different parties involved are the automotive manufacturers (OEMs) and their suppliers. The overall goal of the following report is to identify suitable business models for small to medium sized (SME) automotive suppliers. As the automotive value chain currently undergoes an evolutionary change towards a diminishing vertical integration of the OEMs, it becomes a challenging issue to reconfigure the responsibilities of the suppliers. Thereby OEMs and their suppliers have to cope with a shift from a functional to a process orientated value chain. During this reorganization of the OEM-supplier interface, enterprises realign their strategic intent towards their core competencies as well. Besides the shifting value chain, both suppliers and OEMs have to cope with a consolidation in their industries. This consolidation is impacted by stagnating traditional markets, an ongoing globalization of the value chain, and an increasing productivity pressure in the automotive industry. Looking at the automotive supplier, it becomes obvious that the suppliers are on the one hand challenged by productivity pressures and on the other hand have the opportunity to take over more business of the automotive value chain. The growth potential requires changes in the area of supply chain management and new types of collaboration in the supply network. This prospective development is mainly influenced by a trend towards the outsourcing of entire processes by the OEMs and the increasing need for future innovations in the automotive industry. After discussing the above mentioned issues, the report analyses the role of suppliers with respect to their main customers, the automotive OEMs. Based on the findings business models for suppliers are assessed and key success factors for small to medium sized suppliers are proposed and evaluated. The findings of the evaluation are translated into suggestions for most suitable business models of SMEs. The report concludes with recommendations for the strategy building process indicates problems concerning the shifting value chain, and points out the importance of further research in the field of the small to medium sized automotive supplier industry.

AFRIKAANSE OPSOMMING: Hierdie studieverslag ondersoek die motorvoertuig industrie met verwysing na die hoof deelnemers 'n die opwaartse waarde-ketting. Die partye betrokke is die motorvoertuigvervaardigers (OEMs) asook hul verskaffers. Die oorhoofse doel van die verslag is om gepaste sakeplanne vir klein en medium grootte (SME) ondernemings te identifiseer. Die motorvoertuig industrie se waardeketting ervaar tans 'n drastiese veranderingsproses - gekenmerk deur afnemende vertikale integrasie vanaf die OEMs - wat voortdurende nuwe uitdagings veroorsaak vir die innoverende verskaffer. Beide die OEMs en hul verskaffers moet dus aanpas met hierdie verandering - van funksioneel na proses-georienteerd - in die waarde-ketting. Tydens hierdie herstrukturering van OEM-verskaffer interaksie, moet deelnemers verseker dat die strategiese bedoeling in fyn ooreenstemming is met hul basiese bevoegdhede. Behalwe die verskuiwing in die waardeketting, moet OEMs asook verskaffers aanpas met samesmelting in hulle industrieë. Hierdie proses van samesmelting word beinvloed deur kwynende konvensionele markte, voortgesette globalisasie van die waardeketting, asook toenemende druk om produktief te wees in die motorvoertuig-industrie. 'n Ondersoek in motorvoertuig industrie verskaffers toon dat daar enersyds geweldige uitdagings ervaar word soverre dit produktiwiteitverbetering betref, maar andersyds daar ook geleendhede gebied word vir die verskaffer om verder te integreer deur oornames in die waarde-ketting. Om groei potensiaal te verwesenlik noodsaak dit veranderinge in die veld van verskaffingskettingbestuur, asook nuwe metodes van samewerking in die verskaffingsnetwerk. Hierdie moontlike tendens van integrasie word hoofsaaklik beinvloed deur 'n geneigdheid van OEMs om volledige prosesse te sub-kontrakteur asook deur die toenemende aanvraag vir voortdurende innovering in die motorvoertuig industrie. Laastens ondersoek die verslag die rol van die verskaffer vanuit die oogpunt van hul hoof kliënte, die OEMs. Na aanleiding van die verslag se bevindings word verskaffers se sakeplanne en modelle beoordeel en evalueer en word sleutel suksesfaktore vir die SME verskaffer voorgestel. Die uitslae van die evaluasie word verder verwerk tot in voorstelle wat gepas is vir die sakeplanne van meeste SMEs. Die verslag kom tot voltrekking met aanbevelings in die strategie bouproses rakende die veranderende waardeketting, en dui ook op die noodsaaklikheid van verdere navorsing onder die SME motorvoertuig industrie verskaffers.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/50411
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