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The VW Resende Modular Consortium - Essay Example

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The goal of this paper “The VW Resende Modular Consortium” is to evaluate the contribution of VW’s supply chain strategy to its overall company strategy, with reference to Michael Porter’s strategic framework, to analyze the ways in which VW could employ technology…
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The VW Resende Modular Consortium
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Download file to see previous pages The idea of a modular consortium consists of separating the product into sub-assemblies (modules) which are delegated to and entirely provided by a specific module supplier. Therefore, the module supplier is responsible for assembling its module directly on the automaker’s assembly line (Pires 1998, 225). By establishing strong partnership with 7 key suppliers and outsourcing 100% of its manufacturing, VW was striving to: optimize the operating costs, minimize the coordination costs, to improve cooperation between the partners (suppliers), to improve quality and productivity, to increase the market share, and to utilize space more efficiently.Referring to the Porter’s strategic framework, VW’s strategy of manufacturing trucks in Brazil could be defined as a Focus Strategy. Under a focus strategy the firm concentrates on one or a limited range of segment of the market (Thompson and Martin 2005, p.287). Thus did VW, by focusing its manufacturing process on trucks. Working in the automotive industry throughout the world, VW has made a decision to focus mainly on one segment of the automobile industry in Brazil. It was a truck production sector. While this strategy was different from the overall company strategy, VW had to act in a way that best fitted the organization’s competitive environment in Brazil. The company benefited from its specialization on truck segment by gaining strong competency in the production of trucks and some of their modules. According to the information....
g costs, minimize the coordination costs, to improve cooperation between the partners (suppliers), to improve quality and productivity, to increase the market share, and to utilize space more efficiently. Referring to the Porter’s strategic framework, VW’s strategy of manufacturing trucks in Brazil could be defined as a Focus Strategy. Under a focus strategy the firm concentrates on one or a limited range of segment of the market (Thompson and Martin 2005, p.287). Thus did VW, by focusing its manufacturing process on trucks. Working in the automotive industry throughout the world, VW has made a decision to focus mainly on one segment of the automobile industry in Brazil. It was a truck production sector. While this strategy was different from the overall company strategy, VW had to act in a way that best fitted the organization’s competitive environment in Brazil. The company benefited from its specialization on truck segment by gaining strong competency in the production of trucks and some of their modules. According to the information, received from the interview with Jose Ignacio Lopez, the VW Resende Modular Consortium could enable the company to gain significant competitive advantage among the rivals. These included: modern and productive manufacturing process, relatively low cost, quality of the trucks, simultaneous engineering process with the suppliers, speed in the development and launching of new products, common corporate goals and objectives (trend to work more toward mutual success) (Correa and Park, n.d., pp.1, 7, 10). With Focus strategy approach the company can seek either lower costs or differentiation (Thompson and Martin 2005, p.287). Therefore, by going deeper to the Porter’s focus strategy, it is possible to assume that the VW’s Resende ...Download file to see next pagesRead More
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