22 May 2003 | David Arminas
MG Rover has signed up its first suppliers in Asia and Africa as part of a major new global sourcing strategy.
Larry Beard, international sourcing director, called the move a "wake-up call" to suppliers in western Europe, where the car maker currently sources 95 per cent of its parts.
"We need to lower our cost base dramatically but not lower the quality of delivery or the product," he told SM in an exclusive interview.
"We are finding there are suppliers in places like Korea whose quality is the same if not better than we are currently using."
Beard, who moved from electrical distributor Premier Farnell to take up the newly created post at MG Rover nine months ago, said the price difference between British and overseas parts could be as much as 20 per cent.
Products sourced from outside Europe so far include hoses from Asia and alloy wheels from South Africa and Turkey.
Under the global strategy, MG Rover has put a team of purchasers and engineers in each of South Africa, Korea, China, Turkey, India and the Czech Republic to source locally.
At its Longbridge site, MG Rover will expand its purchasing team, especially for buyers and senior buyers with global experience. "We need people who are culturally aware," Beard said.
He pointed out that even though MG Rover used UK suppliers, some of them in turn sourced the parts from overseas.
He acknowledged that reaction from suppliers in the UK, where it sources 65 per cent of its parts, had been mixed.
There is no percentage target for sourcing parts overseas, although Beard did not rule this out in the future.
He added that MG Rover would keep working to improve the performance of UK suppliers.