Volvo to shed 10 per cent of suppliers in restructure

25 May 2009

26 May 2009 | Rebecca Ellinor

Volvo Car Corporation plans to shed 10 per cent of its suppliers by the end of the year.

Speaking exclusively to SM from company headquarters in Sweden, Bernt Ejbyfeldt, senior vice-president of purchasing, said the move was part of restructuring plans in his division.

The business has about 400 direct material vendors who supply from 850 sites globally and 3,200 vendors of non-production goods and services.

"We are working hard on restructuring, so we would like to reduce the number of suppliers. The first step is to decrease the number of sites by 10 per cent for this year."

Volvo Cars is part of Ford Corporation, so has some suppliers - and supplier sites - in common with its parent. But Ford is evaluating the sale of Volvo and if it goes ahead this will prompt more supply base changes.

"If we sell our own brand we could choose other suppliers. Our volume is much smaller than Ford, so it would be possible to find more suitable suppliers."

Ejbyfeldt was appointed last year to establish a purchasing department for Volvo so that it could work independently of Ford should it be sold.

He has established a quality hub in the Czech Republic, closer to company suppliers. A dozen staff are based there and Ejbyfeldt said he planned to increase this to 20.

He said there had recently been a marked improvement in quality: "Now every month we measure supplier performance and they need to be at the right level to receive new orders. It's quite a tough requirement."

The full interview with Bernt Ejbyfeldt will appear in our 9 july issue.


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