German engineering is considered a strong asset in the automotive sector and something of a seal of quality. A great example of this is the Insignia, developed and produced in the Opel parent plant, an outstanding vehicle ‘made in Rüsselsheim.’ “What’s remarkable is how much of Europe is represented within our flagship,” says Purchasing Manager Stefan G. Weitzel. “To be precise, it includes components from 19 countries.”
Every vehicle consists of around 3,000 new parts
An air intake system from Sweden, headlights from Slovenia, a gas tank from Portugal – Weitzel knows exactly how the Insignia is put together. He coordinates the collaboration between the vehicle platform, which is the technical foundation of a model, and the suppliers who provide Opel with the required components. It is an exciting job that spans all of the stages of the development process and serial production. This involves not only multiple supplier countries but also around 3,000 new parts that are used to assemble every single vehicle.
‘Tech reviews’ for local suppliers
Weitzel’s work begins when the design and development departments plan the concept for a new model. The team members define the specifications for each given component. At this early stage in the project, cooperation with strategic suppliers needs to be fostered. This is Weitzel’s task. He manages the purchasing processes in order to ensure that a supplier can be nominated at the right moment. “The focus is always on quality, technology, service, and price,” he explains. Before a contract is drawn up with a supplier, the Opel purchasers conduct ‘tech reviews’ with the engineering team. These are evaluations that determine whether a service provider meets all of the necessary criteria.
The steering wheel is ready, but not the exhaust system
But how does purchasing work when a component is sourced from thousands of kilometers away and has to be there on time? “The supply chain is a critical part of the car making process,” says Weitzel, referring to the logistics schedule that incorporates many different methods. For example, the door panels of the Insignia are produced in the Czech Republic and delivered directly to the plant in their various customized forms, accurately matching the order of assembly (Long Range SILS). The exhaust systems, whether they come from Poland or Austria, are not assembled until they reach the plant. While this may push up the cost of production, it is the best solution overall in view of the significantly lower packaging and shipping costs.
There’s more to it than just the best price
The insights gained from the logistics chain set up for the current model are crucial to the strategy for the next vehicle generation. “Evolving framework conditions and optimization potentials are analyzed and lead on to further changes,” explains Weitzel. Referring to the multinational purchasing network set up for the Insignia, he has the following to say: “Acquiring the parts themselves, at the best quality and at the best prices, is just one factor contributing to our sales success. The costs for packaging, shipping, warehousing, and sequencing must also be carefully managed.”
SILS are parts that the supplier manufactures and delivers according to how they are assembled in the Opel production line.
Long Range SILS (LRS) are supplied over very long distances from all over Europe. Opel plans and schedules the transportation.
The parts arrive at the plant in the order in which they will be installed. LRS parts are transported from the incoming goods department to the production line by a service provider.
Example: Each vehicle requires its own cable set. The cable sets are manufactured and brought to the plant and production line exactly as set out by the incoming orders, which are optimized for the production sequence.