Buy First, Then Build


The expansion of the Mercedes-Benz plant in Tuscaloosa is in full swing. At the end of 2015, Sabine Lutz, Head of International Procurement Services (IPS), paid a visit to Mercedes-Benz U.S. International (MBUSI) and gained an impression of the location together with her local Procurement team.

The Tuscaloosa production facility is undergoing a process of transformation in order to be able to produce future SUV generations more flexibly, more efficiently and with the customary top standard of quality. The expansion of the plant includes a new body shop, significant improvements to SUV assembly and state-of-the-art logistics and IT.

Selecting suppliers and awarding contracts

IPS is responsible for the global procurement of non-production materials and services, and therefore also for the selection of and awarding of contracts to all of the suppliers involved in the expansion of the plant. “We are playing a defining role in the changes right from the start, in close partnership with the Factory Planning, Production Engineering and Logistics units,” said Sabine Lutz. The introduction of cutting-edge technologies and the end-to-end digitalization of production processes will pave the way for highly flexible production. Daimler is investing a total of US dollars 1.3 billion in the expansion.

We are playing a defining role in the changes right from the start, in close partnership with the Factory Planning, Production Engineering and Logistics units.

Dr. Sabine Lutz, Head of IPS

The biggest challenge to date has been awarding the contracts for the construction measures. The new body shop will cover an area of 125,000 square meters. That is the equivalent of 17 soccer pitches, filled with cutting-edge lightweight construction technologies and groundbreaking logistics and process engineering. The contracts for the construction measures were awarded to a general contractor at the end of May following a multi-step selection and negotiation process. It was important to IPS to also consider suppliers who had not previously been included in the supplier set. To this end, the buyers met with the suppliers on location and also looked at reference projects involving other vehicle manufacturers.

Construction could begin once the contracts for the construction services had been awarded to suppliers by IPS.

Global teams

The next contracts to be awarded will be for the body shop facilities. The teams responsible are multi-national, with some of the buyers based locally at MBUSI. Others are in the German Sindelfingen including the Global Commodity Managers, i.e. the colleagues with global responsibility for the procurement of individual commodities, and who therefore ensure that the same standards are applied everywhere in the world. In Tuscaloosa, it is about a three-digit million figure.

The switch to the new logistics IT system is being supported by expert companies that have also been engaged by IPS. After all, it is only possible to make the most of the state-of-the-art facilities if the suppliers are seamlessly integrated into the Mercedes-Benz production chain. IPS is therefore playing a crucial part in successfully expanding Tuscaloosa to make it a high-tech plant for SUVs. Until production of the next generations of vehicles starts, the message for everyone involved is: Stay on the gas!

Jan 20, 2016
Udo Stohler, Viktoria Brüller