Global sourcing in the automotive supply chain: The case of Fiat Auto "project 178" world car
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cam-volp1.pdf
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Author(s)
Volpato, Giuseppe
Camuffo, Arnaldo
Date Issued
June 12, 2002
Abstract
Objective of this paper is to present how Fiat Auto has developed a peculiar and
innovative global sourcing model in conjunction with the rolling out of its "world car"
project ?178?. Differently from other OEMs, that have designed vehicles with common
"global" underbody platforms adapting body, trim levels and ride characteristics to local
conditions, Fiat Auto "world car" concept and globalization strategy is more ambitious
and complex, since the standardization of the 5 models stemming from the 178 platform
involves absolute cross-country identity not only of interior/exterior design and contents
but also of quality levels, robustness and compliance with European rules in terms of
safety and pollution.
The international supply chain supporting this globalization process can be interpreted
as a double network of operations and transactions: the ?internal? supply chain, where
"makes" are exchanged between Fiat Auto plants; the ?external? supply chain where
?buys? are purchased by Fiat Auto plants from suppliers. In the "external" supply chain,
Fiat Auto manages, in a global sourcing perspective, a relatively stable group of
suppliers, though in a competitive perspective, in order to guarantee cross-plant and
cross-market component uniformity and worldwide efficiency.
After depicting Fiat Auto global sourcing policies and the related organizational
structures and processes, the paper highlights achievements and challenges of the
model.
The paper argues that Fiat's global sourcing, while putting competitive pressure on
suppliers by means of worldwide information transparency on prices, quality and
service, works as a performance improvement stimulator within OEM-first tier suppliers
partnership relationships ("voice" mechanism), rather than a pure and simple supplierswitching
device ("exit" mechanism).
Subjects
global sourcing
project 178
Fiat Auto
globalization
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