Made in China for China
The Daimler purchasing units are raising the share of value creation of local suppliers in China. Once found, new suppliers are developed in a targeted manner. Trade fairs, training, on-site visits. An important aspect in this process: the sustainability requirements.
Daimler continues to increase local suppliers’ share of value creation at its production location China. The number of local suppliers has already risen from five to three hundred in the last decade, and quite a few new suppliers are to be added by 2020. The motto is “Made in China for China.” Buyers at the local sites – the “procurement hubs” – are keeping a watchful eye out for new suppliers. At trade fairs and “sourcing weeks,” as well as during workshops and on-site visits. Once identified, new suppliers are qualified in the next step. Through a great variety of measures.
Raising the localization rate!
Daimler’s Global Procurement Trucks and Buses supports the Chinese suppliers during the entire development process. The competent team is the “China Sourcing House” at Daimler Greater China in Beijing. It is responsible for such measures as on-site assessments and audits of the local suppliers. As well as for providing training on Daimler’s standards. In trainings on topics like quality, Development, Supplier Management, and Logistics are involved in the education. Recently, the units completed a joint training for 130 suppliers in only four days.
Daimler has already achieved a very high localization rate for trucks in the framework of the joint venture Beijing Foton Daimler Automotive (BFDA). These suppliers are now also to be qualified in the area of exports at various Daimler Trucks locations around the world. The Group has already had many extremely positive experiences in this area in recent years. At the same time, Daimler also supports Chinese suppliers to develop their international operations.
In addition, Mercedes-Benz Cars Procurement and Supplier Quality is also pursuing the goal of increasing the localization rate in China. The “local content share” in the plant of Beijing Benz Automotive (BBAC) is currently at around 60 percent. With the start of future model series, this share is to be increased to 80 percent. Mercedes-Benz Cars Procurement and Supplier Quality is working intensively on expanding the vertical localization even further.
The passenger car buyers have already successfully developed 300 suppliers. In their “Supplier Academy”: A facility, in which the objectives, work processes and requirements of Procurement are taught. Effectively. The ten largest suppliers of Mercedes-Benz Cars already include two purely Chinese companies. Last year, eleven of the 300 suppliers were honored as “Outstanding Supplier” by BBAC.
Nothing can work without sustainability standards!
Procurement also emphasizes innovation, top quality and partnership in the collaboration in China. Another basic principle for all business relationships are the sustainability requirements. They relate to working conditions, human rights and safety, business ethics, and Compliance. Procurement performs targeted on-site assessments in order to determine if the suppliers meet these requirements. In addition, since 2010 supplier training is provided by Daimler in a joint effort with other automotive manufacturers. This kind of training was provided in China in 2012, 2014, and 2015. In June 2015, an international workshop on sustainable supply chains was held in Bejing, at which Daimler and local suppliers exchanged experiences.
The Daimler purchasing units continue to keep a watchful eye on China. The market may be growing more slowly, but: China is and will continue to be one of the most important sales regions for vehicles.