Introduction
Audi produces luxury brand sedans for consumers around the world. As the manufacturer of premium automobiles with its main production facility in Ingolstadt, Germany, but with plants in Hungary, China, Thailand and Brazil as well, the company relies upon more than 1000 suppliers throughout its global supply chain.
Selecting International Strategy
The six components of global supply chains include: strategy and alignment; supply chain assets and routing; process, procedures and systems; planning and communication; outsourcing; and people and culture. A demand-driven plan and business model derived from information retrieved in real-time is preferable and is one that Audi has developed over the years to enhance its standing in the marketplace. It has developed an adaptive and quick-footed supply chain, particularly in Ingolstadt where it uses a Just-in-Time supply deliver system. Innovation has also been key to managing the company’s success over time, with its vehicles reflecting consumer demand in the luxury brand market. Its supply chain allows it to keep costs low and efficiency high, as an order-to-delivery system is also in place. Audi’s just-in-time strategy facilitates optimum communication; it boasts an in-house delivery system throughout Europe and outsources delivery in Asia; its people and culture is celebrated...
As Audi does not “manufacture most of [its] parts, systems, and modules internally” (Diaz, 2006, p. 102), it must rely upon outsourcing to meet its needs—and the nature of the business means it must have parts quickly, which it can do with the JIT strategy. Parts are sent right from the supplier in Guterverteilzentrum to the production line in Ingolstadt in a matter of minutes. In other plants, the process is a little slower as the suppliers are not as centrally located to the production plant, which is why most of the production is done in Germany. Costs are kept low as a result and responsiveness is immediate.
The Elements of Global Supply Chain
Facilities, inventory, transportation, information sharing and procurement are the five elements of the global supply chain that Audi incorporates into its strategy. Its facilities are centralized in Ingolstadt with suppliers and the main production plant literally working side by side. Inventory is cycle-based. Transportation is in-house in Europe and outsourced in China. It uses an order-to-delivery system which…
