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Outsourcing in the automotive industry: From JIT to Modular Consortia

Author

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  • Collins, Robert
  • Bechler, Kimberly
  • Pires, Silvio

Abstract

The Modular Consortia approach to production being implemented by such leading-edge automotive manufacturers as Skoda and Volkswagen, is one of the latest experiments in manufacturer-supplier relationships. Competitive pressures and the on-going search for increased efficiencies and greater profits are driving automotive manufacturers and suppliers to reevaluate their respective supply chain activities and relationships. Automotive manufacturers are rationalizing the supply base, defining new supply requirements and increasing their use of outsourcing as a strategic alternative. In response, the automotive supply industry is experiencing consolidation and restructuring (with the creation of 'tiers of suppliers') and a move towards modular supply. This article explores the manufacturer-supplier relationship at two of Skoda's facilities in the Czech Republic, and Volkswagen's new truck and bus plant in Resende, Brazil. Two conceptual models are developed, the Supplier Profile Matrix and the Stairs of Transformation, to illustrate the challenges and opportunities faced by both manufacturer and supplier as they move beyond JIT to integrated supply and to modular consortia.

Suggested Citation

  • Collins, Robert & Bechler, Kimberly & Pires, Silvio, 1997. "Outsourcing in the automotive industry: From JIT to Modular Consortia," European Management Journal, Elsevier, vol. 15(5), pages 498-508, October.
    • Handle: RePEc:eee:eurman:v:15:y:1997:i:5:p:498-508
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    Cited by:

    1. Luiz Ricardo Cavalcante & Bruno César Araújo, 2015. "Market Leadership in the Brazilian Automotive Industry: The Case of Marcopolo," Discussion Papers 0196, Instituto de Pesquisa Econômica Aplicada - IPEA.
    2. Lodenius, Martin & Heino, Erja & Viljakainen, Sanna, 2009. "Introducing a new model for material savings in the Finnish paper industry," Resources, Conservation & Recycling, Elsevier, vol. 53(5), pages 255-261.
    3. Luiz Ricardo Cavalcante & Bruno César Araújo, 2013. "Market Leadership in the Brazilian Automotive Industry: The Case of Marcopolo," Discussion Papers 1906a, Instituto de Pesquisa Econômica Aplicada - IPEA.
    4. Mickey Howard & Joe Miemczyk & Andrew Graves, 2006. "Automotive supplier parks: An imperative for build-to-order?," Post-Print hal-01118772, HAL.
    5. Cheng, Liang-Chieh (Victor), 2011. "Assessing performance of utilizing organizational modularity to manage supply chains: Evidence in the US manufacturing sector," International Journal of Production Economics, Elsevier, vol. 131(2), pages 736-746, June.
    6. Parment, Anders, 2008. "Distribution strategies for volume and premium brands in highly competitive consumer markets," Journal of Retailing and Consumer Services, Elsevier, vol. 15(4), pages 250-265.
    7. Seyoum, Belay & Lian, Yunshan, 2018. "Market performance implications of modularization: Evidence from global auto firms operating in China," International Business Review, Elsevier, vol. 27(4), pages 852-866.
    8. Klaus E Meyer, 2000. "International Production Networks and Enterprise Transformation in Central Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 42(1), pages 135-150, April.
    9. Pero, Margherita & Stößlein, Martin & Cigolini, Roberto, 2015. "Linking product modularity to supply chain integration in the construction and shipbuilding industries," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 602-615.
    10. Alford, Dave & Sackett, Peter & Nelder, Geoff, 2000. "Mass customisation -- an automotive perspective," International Journal of Production Economics, Elsevier, vol. 65(1), pages 99-110, April.
    11. David Guerrero & Hidekazu Itoh & Guanie Lim & Petronille Harnay & Guillaume Corre, 2023. "Supplier networks at the integrated peripheries of the automobile industry: the case of keiretsu suppliers in Thailand," Post-Print hal-04166229, HAL.
    12. Anders Larsson, 2002. "The development and regional significance of the automotive industry: supplier parks in western Europe," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(4), pages 767-784, December.

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