Global sourcing in the automotive supply chain:The case of Fiat Auto
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cam-volp1.pdf
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Author(s)
Volpato, Giuseppe
Camuffo, Arnaldo
Date Issued
May 9, 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
underbody platforms
global sourcing
world car
Fiat Auto
project 178
automotive supply chain
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