"Porsche wants to do the right thing with its suppliers"

Interview with Uwe-Karsten Städter, Porsche AG Procurement Officer

Uwe-Karsten Städter, the executive in charge of Porsche's procurement department, is a monthly German magazine.Beschaffung aktuellSo, I was interviewed about semiconductor supply problems, fragile supply chains, and the future in the current automobile industry, so I took a look.

It's a little long ~.

"Q" is the question from the interviewer and "A" is the answer from Städter:

Semiconductor supply shortage problem in the automobile industry

Q: I've heard that there is a problem with semiconductor supply over the past few weeks, and I think the automobile industry has been greatly affected. What is the current state of Porsche's supply chain?

A: The entire industry is affected by the shortage of semiconductors, and it is a difficult situation for everyone. At Porsche, we are managing the production plan of the vehicle model while optimizing it, so it is still somehow managed so far.

Q: In the last few weeks or months, there have been various events that could damage the economy.

A: That's right. It started with a coronavirus pandemic, followed by a semiconductor shortage. In addition, many semiconductor factories were forced to suspend production due to power outages and fires.

In addition, there was a ship grounding on the Suez Canal. This blocked sea shipping routes between Europe and Asia, and also caused water shortages due to the worst drought in Taiwan. Taiwanese chip makers are responsible for almost two-thirds of the world's semiconductor production. Water is very important to the tip industry.

Now Taiwanese chip makers are starting to work as usual, but I've never experienced so many things in my 47-year career anyway.

Q: In addition to semiconductors, are there alternative suppliers in Europe for products that are in short supply from Asia?

A: Porsche is a premium manufacturer and is supplied by a supplier whose high level of expertise has been proven, and we are co-developing with the supplier some products that have utility model rights.

These are based on very complex specifications that have been meticulously checked by the Technology Development and Quality Assurance departments, and it is not easy to ask other suppliers for them.

And Porsche attaches great importance to long-term partnerships with its suppliers and does not abandon them when they are in crisis.

Q: The various events this time show how vulnerable the global supply chain is, but will the supply chain change in the future? In this case, will you move away from globalization and return to procurement from a more local source?

A: It is clear that everyone is benefiting from world trade, and globalization cannot be undone. In the first place, just because it is procured locally does not mean that everything will fit.

For example, Porsche also has a supplier in Italy, but in a pandemic, production of that supplier was stopped at the request of the government. Even if it's close, I don't know where or what will happen.

That said, I think there will be changes in the medium term due to the increasing tendency of political isolation and the growing protection trade principle. In that case, some companies may be able to bring the supply chain closer to the production line.

Q: In July 2019, Porsche officially introduced additional criteria for sustainability ratings.

A: We apply our policies very rigorously to check and evaluate all suppliers who do business with Porsche using Sustainability Ratings or S-Ratings.

It also introduced the additional requirement that supplier companies need to demonstrate their climate protection-related goals. For example, make sure that you are investing in environmental projects or using green power. Anyway, "do the right thing with the supplier".

Q: You seem to be working with an S-Rating startup lately, what are you doing?

A: Since last fall, Porsche has been using AI (artificial intelligence) to make its supply chain more transparent. This allows for the analysis of particularly important raw material areas and the rapid discovery of potential sustainability risks.

The basis of this AI algorithm was developed by Australian startup Prewave.

Using this technology, supplier-related news can be detected and evaluated from media published in more than 150 countries & more than 50 languages, as well as SNS. If you find that there is a risk in your supply chain, check the problem directly and take necessary measures.

Q: Porsche plans to electrify half of its vehicles by 2025. This will require a strong new supplier, but how do you deal with it?

A: Porsche is always changing, so it is successful. I'm just doing the same for electrification.

Taking this as an opportunity, I think we have entered a new territory of Porsche in electric powertrains. New components and suppliers were a big challenge, and not everything worked smoothly from the beginning.

A good network of buyers (procurement department) and technology development department is very important and they work very closely with the production line and quality assurance department. This allowed everyone involved to quickly understand the new technology.

After that, I started talking with the supplier and it worked very well. The exact result is Taycan. In recognition of our dedication, Taycan not only sold 20,000 units last year, but was also able to win more than 45 awards around the world.

Q: What is the status of (employee) training at Porsche?

A: We train our employees as part of an ongoing process. It begins on the first day of work and continues throughout each person's career with a personalized program.

For me, "procurement" means realizing the growth of value creation. I think it can only be done by very talented people who are continually working on skills and self-improvement.

According to an in-house employee survey, our training program has been well received. Porsche's procurement department has been very successful over the years, with more than 90% employees saying they are very happy with their work.

Q: You have started a pilot project for eFuels in Chile in collaboration with Siemens Energy and other international companies. What role did the procurement department play in this project?

A: This project was started jointly by my colleague Michael Steiner (Research and Development Officer).

The development department promotes the technical part related to renewable fuels and our procurement teamPartner search and contract issuesWas in charge of. eFuels is like Porsche's core. We are here thinking of ourselves as "pioneers".

Next year we will get 130,000 liters of eFuels from Chile,Test with a Porsche Super Cup racing car.. In the future, we would like to use eFuels with existing models such as 911.

Q: You have a great career in the procurement department, but what advice can you give to young people who want to pursue the same career?

A: Passion is required. A career cannot be achieved without passion. The other thing that is commonplace in the procurement department is "if there is an opportunity, we will identify what it is and take on the challenge."

Procurement is a vocation for me, but if you don't like taking on challenges, you should stop. He is passionate about what he is doing and tells everyone to treat others with dignity and respect. This is the only way to achieve the best results in the long run.

Over the years, procurement tasks have changed, buyers are now value-creating partners, and we are providing know-how to various areas of the company. As a result, the work is diverse, and as a result, the buyers who can do it will be able to succeed.

Source: (Official) Städter: “We want to do the right thing together with our suppliers”

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