In the past decade, new auto plants have pursued a different strategy to increase line efficiency and reduce logistical problems: have the major parts suppliers build their plants next door to the main auto assembly plant. This was pioneered at Opel's Eisenach (Clarke 2005), Jeep's Toledo (Clanton 2004), and Smart's Hambach (France) plants (Lewis 2004). In each case, the suppliers shared in the investment in product development, the capital cost of the plant, and the risk of new model introductions. In return, the suppliers received a long-term contract at a rate that guaranteed that they would make money -- as long as the autos were a success.
Porsche faces some difficulty in performing the same feat in Zuffenhausen for two reasons: (1) it is still a niche manufacturer, with fewer than 100,000 total units (even counting production in Leipzig and Bratislava), and (2) the Zuffenhausen plant is difficult to expand, and to automate further.
While Porsche's short-term strategies of sharing manufacturing facilities has helped, it may be due for a consolidation in the future.
At present, final assembly takes place in four places (including Valmet in Finland for Boxsters). With the addition of a fifth line and concomitant increases in expected production, Porsche may want to consider a consolidation at a "Greenfield" plant, in which it can consolidate some of its assembly.
Given the difficulty of laying off workers, and the need for long-term supplier relationships, the new plant may need to be located near Stuttgart, but out of the suburban/urban sprawl that has grown around the original factory in Zuffenhausen.
In order to reduce logistical risks, Porsche may want to concentrate warehousing next to its plant, in a way to create a small buffer stock and keep the assembly plant performing at best efficiency.
This is a better solution for a small, niche manufacturer like Porsche. The cautionary tale here is the Hambach plant for Smart. Although Mercedes was successful in gaining the commitment of parts manufacturers to create factories on site, they then proceeded to fall short of production targets by 50%, making the whole investment...
The target volume of 200,000 units per year was twice what Porsche can expect in the next few years -- and therefore an unattractive volume for many of Porsche's suppliers to build new plants next door.
Porsche's problems in 1992 nearly forced it into receivership. Wiedeking's willingness to bring in Toyota engineers to revamp their logistics and assembly processes shaved man-hours by half, saving the company and restoring acceptable profit margins.
Porsche's potential problems today could still come from logistical issues. The addition of a fifth, very different type of platform could destabilize its production and logistics system. Without the unit volume to justify an "assembly campus," a la Mercedes or Jeep, means that the company will need to find other solutions to improve logistics. By creating a new, nearby "Greenfield" plant with a parts-positioning warehouse, Porsche has the opportunity to take the best of "Just-in-Time" logistics concepts while rationalising its production further.
Bennet, S. "Porsche Boxster." PistonHeads. November 29, 2004. http://www.pistonheads.com/doc.asp?c=105&i=9542 (Accessed October 18, 2007).
Clanton, B. "DaimlerChrysler aims to make Jeeps faster, better at Toledo facility." Detroit News, February 22, 2004: n.p.
Clarke, C. "The history of production systems in the automotive industry." In Automotive Production Systems and Standardisation, by WA and Bihn, M Muller, n.p. Heidelberg: Physica-Verlag HD, 2005.
IBM. "Parts and service management sollution from IBM." IBM. 2007. http://www-03.ibm.com/industries/automotive/doc/content/solution/2853600108.html (Accessed October 18, 2007).
Lewis, a. "Smart lesson in quality: carbuilders and suppliers strive together in Smartville Nation." Automotive Industries, 2004: n.p.
Lunsford, JL. "Boing, in Embarrassing Setback, Says 787 Dreamliner Will Be Delayed." Wall Street Journal, October 11, 2007: 1.
Nash, N.C. "Putting Porsche in the Pink." The New York Times, January 20, 1996: n.p.
Shirouzu, N. "Toyota May Delay New Models to Address Rising Quality Issues." Wall Street Journal, August 25, 2006: n.p.
Skinner, CW. "The Focused Factory." Harvard Business Review, 1974: 40-48.
The new car is front-engine, rear-wheel drive. The 911 is rear-engined, whilst the Boxster/Cayman are rear-wheel drive and centre-engine. The manufacturing…
Porsche Case Analysis The intent of this case analysis is to evaluate the buyer decision process the typical Porsche customer undertakes when searching for a new high-performance sports car. The Porsche sports car enthusiasts' decision process is significantly different than that of the Cayenne and Panamera customers, and these differences will be discussed. The factors that contributed to Porsche selling significantly more lower-priced models in the 1970s and 1980s is also
All of these attributes together fuel a high level of mastery of their jobs, a critical element in job satisfaction (Sull, 2007). Finally the aspects of personal and work outcomes, which include high internal work motivation, high satisfaction with work and low turn-over indicate that BMW employees have found competency in their work. The reliance on transformational leadership techniques in terms creates a sense of purpose throughout the company.
Segmenting International Markets Companies that operate internationally will also segment the market internationally. International segmentation is undertaken by companies identifying groups of consumers with common traits or characteristics, which may traverse national borders (Kotler & Keller, 2011). One of the most basic methods of segmenting international markets is through regional, or national, segments based on social or cultural differences. For example, when KFC first entered the Chinese market the market