Case Study: Supplier Relationship Management at Volkswagen Group

Abstract

On the occasion of the VW Group Supplier Awards in 2005, Mr. Garcia Sanz, Member of the Board of Management of Volkswagen AG responsible for procurement, honored the award winning suppliers, saying: “Partnership is a key element of our long-term strategy. In these turbulent times, the Volkswagen Group Award recognizes successful cooperation” (BNET 2005). This declaration made us curious, how Volkswagen Group manages supplier relationships. The case study at hand stems from interviews with experts in procurement at Volkswagen Group, Wolfsburg, Germany, in August 2008. Given our model approach, we were particularly interested in the management of buyer-supplier relationships, the contracts employed and the handling of quality issues. In the following, we will document Volkswagen Group’s current approach to Supplier Relationship Management including the different models for supplier management.

Volkswagen AG is a growing global corporation with eight car brands, ca. €105 billion sales revenue, over 5.7 million vehicles produced per year, ca. 325,000 employees, and 42 production facilities located in Europe, Asia, Africa, and America (Garcia Sanz 2007). Based in Wolfsburg, Germany, Volkswagen Group is Europe’s largest and one of the world’s leading car manufacturers: As regards sales volume, Volkswagen Group is the fourth largest automaker worldwide (2006). The purchase quota is around 60–70%.