Benchmarking supply strategies in the automotive and the power tool industry


Diploma Thesis, 2006

75 Pages, Grade: 1.7


Excerpt

Table of Contents

List of Figures

Acronyms

1 Introduction
1.1 Problem Definition and Scope of the Diploma Thesis
1.2 The Hilti Corporation: Introduction and Background Information
1.3 Structure of the Diploma Thesis

2 Definitions and Classifications
2.1 Supply Management Definitions
2.2 Classification of a Supply Strategy
2.3 Introduction to Supply and Sourcing Strategy Concepts
2.4 The Sourcing Strategy Triangle
2.4.1 Global Sourcing versus Local Sourcing
2.4.2 Supplier Management
2.4.3 Commodity Management

3 Benchmarking the Sourcing Strategy Triangle in the Automotive and the Power Tool Industry
3.1 Applied Benchmarking Methodology
3.2 Benchmarking Analysis of the Sourcing Strategy Triangle
3.2.1 Benchmarking Global Sourcing versus Local Sourcing
3.2.2 Benchmarking Supplier Management
3.2.3 Benchmarking Commodity Management

4 Supply Strategy Recommendations for Power Tool Companies focusing on the Hilti Corporation

5 Conclusion and Future Aspects

References

List of Figures

Fig. 1: Trends in Transferring Value Creating Activities to East Asia

Fig. 2: The Sourcing Strategy Triangle

Fig. 3: The Organization of the Hilti Corporation

Fig. 4: Classification of Power Tools

Fig. 5: Basic Elements of a Strategy

Fig. 6: Strategic Levels

Fig. 7: Generic Elements of a Sourcing Strategy

Fig. 8: The Sourcing Strategy Triangle

Fig. 9: Manufacturing Labor Costs - Analysis and Forecast

Fig. 10: Geographical Sourcing Trends in the Automotive and the Power Tool Industry

Fig. 11: Kraljic’s Purchasing Material Portfolio

Fig. 12: Wildemann’s Supply Value-Risk Portfolio

Fig. 13: Wildemann’s Supplier Development Potential-Bargaining Portfolio

Fig. 14: Global and Local Sourcing Responsibility in the Automotive Industry

Fig. 15: Global and Local Sourcing Responsibility in the Machinery Industry

Fig. 16: Purchasing Value divided by Regional Sourcing Shares in the Automotive Industry

Fig. 17: Purchasing Value divided by Regional Sourcing Shares in the Machinery Industry

Fig. 18: Migration of Sourcing to Eastern Europe, Asia and Latin America

Fig. 19: Pursued Sourcing Strategies for individual Sourcing Regions in the Automotive Industry

Fig. 20: Pursued Sourcing Strategies for individual Sourcing Regions in the Machinery Industry

Fig. 21: Supplier Structure in the Automotive and the Power Tool Industry

Fig. 22: Supplier Management in the Automotive Industry analyzed by Commodity Groups

Fig. 23: Supplier Management in the Machinery Industry analyzed by Commodity Groups

Fig. 24: Purchasing Value Shares for Commodities in the Automotive Industry

Fig. 25: Purchasing Value Shares for Commodities in the Machinery Industry

Fig. 26: Pursued Commodity Sourcing Strategies in the Automotive Industry

Fig. 27: Pursued Commodity Sourcing Strategies in the Machinery Industry

Acronyms

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“To produce the best products worldwide, you need more than ideas, designs and specifications. You need to choose the very best suppliers…”[1]

1 Introduction

In many business administration and engineering concepts, the automotive industry serves as a best practice example for other industries. Almost every manufacturing company is trying to imitate the Toyota Production System (TPS) which is one of the most popular examples for the best practice transfer from the automotive industry to other businesses.[2] The same accounts for the field of supply management in the automotive industry.[3] Particular aspects in the field of supply and sourcing strategies in the automotive industry - especially the degree of vertical integration and supplier management - were already researched and analyzed by the following researchers: Wildemann (2000), Van Weele (2002), Jahns (2005), Verespej (2005) and Dobler and Burt (1996).[4] Only one publication of a supply strategy benchmarking approach between the automotive and other industries could be identified: Schuh, Pfeifer, Klotzbach and Knoche’s (2005) supply management benchmarking.[5] However, in this benchmarking approach, no detailed recommendations for a particular industry were published by Schuh et al (2005) which shows the importance of the approach in this diploma thesis; a number of aspects can be learned from the automotive industry in the field of supply management strategies but these findings need to be transferred into recommendations to provide a basis for the implementation of these ideas.

Before the problem definition and the scope of this diploma thesis are further explained in section 1.1, practical examples from the automotive and the power tool industry are now provided to show that supply and sourcing strategies in these two industries can be benchmarked and the same basic supply structures can be observed. First, it needs to be stated that supply management is in most industries among the value creating activities which are transferred by large international corporations to East Asia, according to Geissbauer and Schuh (2004).[6] This can be seen in the following figure 1.

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Fig. 1: Trends in Transferring Value Creating Activities to East Asia

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Source: Geissbauer and Schuh (2004), p. 10, slightly modified.

In the automotive as well as in the power tool industry, Original Equipment Manufacturers (OEM) are installing satellite supply management offices, international procurement offices (IPO) or even whole supply organizations to coordinate supply management activities near local plants or important markets.[7] “Plan global, act local” is the principle which currently characterizes supply management strategies for most OEMs in the automotive and the power tool industry.[8]

Besides East Asia, also Eastern Europe is becoming more and more important in the automotive and the power tool industry as a market for selling products or services but even more as a sourcing region for services, finished products, modules as well as parts and components.[9] In addition to that, suppliers in both industries tend to vertically integrate their business models in order to develop towards system or even tier-1 suppliers: the number of independent and specialized suppliers which are only able to supply simple parts or components is shrinking and vertically integrated system suppliers with an increased supplier bargaining power such as Metabo and Bosch are taking over more and more business in the automotive as well as in the power tool industry.[10] Trent (2005) therefore states that the bargaining power in OEM-Supplier relationships is in the process of change: “power has begun to shift from the buyer to the seller” which means that the traditional approach of demanding price cuts year-after-year for the reduction of purchasing expenses is no longer successful in most industries.[11] Furthermore, make or buy decisions are more and more answered with supply and sourcing strategies based on contract manufacturing: popular examples in the automotive industry are premium specialty cars.[12] The power tool industry follows this trend: Bosch and other power tool OEMs sourced the manufacturing of entry level power tools such as drills or jigsaws out to contract manufacturers.[13]

Therefore, as illustrated, the automotive and the power tool industry offer relevant aspects for a benchmarking analysis in the field of supply strategies. To illustrate the scope and the structure of this benchmarking analysis in the diploma thesis, the next sections 1.1 to 1.3 illustrate the problem definition and the scope of the diploma thesis in subsection 1.1, give a brief overview over the Hilti Corporation in section 1.2 and explain the structure of the diploma thesis in section 1.3.

1.1 Problem Definition and Scope of the Diploma Thesis

The problem which is addressed in this diploma thesis is the research deficit in the field of benchmarking supply and sourcing strategies. As it was stated in the introduction, no academic publication could be identified in which supply or sourcing strategies in the automotive industry are benchmarked with another industry and detailed recommendations for a particular industry are derived. This lack of academic research is related to a general research deficit in the whole field of supply management which was already identified by Wildemann (2000), Van Weele (2002) and Jahns (2005).[14]

For understanding the scope of the diploma thesis, it is necessary to take Jahns’ (2005) findings into consideration;[15] the field of supply management strategies is complex and it includes different functional fields, such as process management, human resource management, controlling, performance measurement and other functional aspects.[16] Therefore, the whole field of supply management cannot be entirely benchmarked within two industries in a diploma thesis. Because of that and to reduce complexity, the sourcing strategy triangle which is further explained in section 2.4 and shown in the following figure 2 was developed as a benchmarking framework.

Fig. 2: The Sourcing Strategy Triangle

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Source: Own Illustration

The sourcing strategy triangle is a holistic framework which covers the entire aspects of a sourcing strategy within the field of supply management and it was developed in the conception process of this diploma thesis; the scope of this diploma thesis is set on benchmarking the sourcing strategy triangle with respect to the meta-level of supply management in the power tool and the automotive industry. As this diploma thesis is written for the Hilti Corporation, the special circumstances of this company are also taken into consideration for the benchmarking approach in chapter three as well as for the recommendations in chapter four. To provide the basis for this analysis, necessary background information about the Hilti Corporation is given in the following section 1.2.

1.2 The Hilti Corporation: Introduction and Background Information

The history of the Hilti Corporation was already described in a number of case studies by Moser, Weth, Rochel and Weidmann (2005), Killing (2001) and Bruch and Bieri (2004).[17] This section of the diploma thesis is mainly based on Moser et al’s (2005) research.[18]

The Hilti Corporation was founded in 1941 as a small family business in Schaan in the Principality of Liechtenstein. In 2004, over 16,000 employees in more than 120 countries were working for the Hilti Corporation and generated in the same year worldwide net sales of CHF 3299 Mio..[19] In 2005, more than two thirds of Hilti’s employees worked in the fields of sales and customer service due to the company’s direct sales model.[20] The Hilti Corporation was still privately owned in 2005: all registered shares were held by the Martin Hilti Family Trust. This ownership structure of the Hilti Corporation lead on the one hand to a corporate strategy which was based on long term growth because no short term targets expected by a fragmented group of shareholders or banks needed to be fulfilled. On the other hand, the ownership structure also offered the flexibility of implementing necessary changes in a short period of time due to the small number of stakeholders. One example for the viability of implementing these changes was the organization of manufacturing and supply activities. To reduce manufacturing expenses and to achieve a holistic supply perspective, the functions of sourcing and manufacturing were integrated into one business unit at the Hilti Corporation in order to achieve increased objectivity in make or buy decisions because they were no longer influenced by a focus set on Hilti’s own plants and manufacturing capabilities. This was realized in the organizational structure of the Hilti Corporation which did not include a board member with the single responsibility for operations and manufacturing. The supply chain board member was in charge of managing make-or-buy-decisions and the responsibility for purchasing, manufacturing and global operations together with logistics which can be seen in the following figure 3.[21]

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Fig. 3: The Organization of the Hilti Corporation

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Source: Hilti internal document

Besides background information about Hilti’s organization, it is also necessary to gain an understanding of the markets in which Hilti was active in 2005 to understand the field of supply management at the Hilti Corporation. During this year, the products offered by the Hilti Corporation were in the following areas:

- drilling and demolition,
- direct fastening,
- diamond and anchoring systems,
- firestop and foam systems,
- installation,
- measuring and screw fastening systems,
- cutting and sanding systems.

These product ranges could also be further subdivided into power tools (drills and jigsaws for instance) and consumables (mechanical and chemical anchors or drill bits and screws for instance). The customer base in the power tool industry could be divided primarily into two markets: professionals and non professional ‘Do It Yourself (DIY)’ customers. Concerning these two customer groups, a focus is set in this thesis on the professional market as this market is in the focus of the Hilti Corporation. Professional customers pay a higher price for power tools but also request a higher product quality compared to DIY customers. These professional customers are served on the worldwide professional market for power tools by a number of premium OEMs, such as Black & Decker (the largest international vendor of power tools for the DIY and the professional market in 2004; DeWalt also belongs to the Black & Decker Corporation), TTI (a Hong Kong based Corporation which acquired Milwaukee® and AEG® electric power tools from the Swedish Atlas Copco Corporation in 2004), Hilti (based in the Principality of Liechtenstein), Bosch (a diversified German Corporation), Makita (a Japanese Corporation), Hitachi Koki (Hitachi’s power tool branch which is also based in Japan) and Illinois Tool Works (ITW) (a diversified American Corporation with over 260 subsidiaries).[22] However, some of Hilti’s competitors - such as Bosch or Black & Decker - also serve customers from the DIY as well as from the professional market. Concerning sales, it can be said that the world wide power tool market (professional and DIY) had a value of € 7.2 billion in 2003, according to Werkzeuge News (2004) and can be divided into the tool segments which are shown on the following figure 4.[23]

Fig. 4: Classification of Power Tools

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Source: Hilti internal document

Within the majority of these product ranges, the Hilti Corporation achieved to conquer a product quality and innovation based leadership position. Engineering but also research and development were among the core competencies of the Hilti Corporation and therefore the product claim ‘Hilti. Outperform. Outlast.’ was communicated.[24] Nevertheless, Hilti’s above mentioned power tool competitors were also trying to increase their market share by offering innovative products but also by cutting prices. In order to remain competitive, Hilti therefore reduced its manufacturing expenses with different measures. One measure to achieve long term cost savings was a supply and manufacturing shift from High Cost Countries (HCCs) towards Low Cost Countries (LCCs). Especially Eastern Asia and Eastern Europe were among the regions which were in the focus of the Hilti Corporation for increasing supply as well as manufacturing activities which were mainly centrally coordinated. In addition to that, the Hilti Corporation also started to move its own manufacturing activities directly into emerging markets, in particular into Eastern Europe and Eastern Asia, with a focus on China.[25] LCC sourcing as well as LCC manufacturing became a common trend in the power tool industry, especially with a focus on products with a low technical complexity.[26] Hilti and most other power tool OEMs therefore still manufactured technically complex products in the country of origin of the vendor but started to source and produce simple products in LCCs.

1.3 Structure of the Diploma Thesis

Firstly, chapter one provides an introduction including the problem definition (section 1.1), background information about the Hilti Corporation (section 1.2) and the structure of the diploma thesis (section 1.3). This is followed by supply management definitions and classifications which are given in chapter two of the thesis; supply management terminologies are defined (section 2.1), a supply strategy is explained in its strategic environment (section 2.2) and different supply management concepts are explained and analyzed (section 2.3). Besides that, also the sourcing strategy triangle which is used for the benchmarking approach is introduced in section 2.4. After that, chapter three includes the benchmarking analysis of the sourcing strategy triangle. In section 3.1, the applied benchmarking methodology is explained before the actual benchmarking analysis is pursued in section 3.2 which is divided into three sections according to the three elements of the sourcing strategy triangle: benchmarking global versus local sourcing (section 3.2.1), benchmarking supplier management (section 3.2.2) and benchmarking commodity management (section 3.2.3). Based on this benchmarking analysis, recommendations are derived for power tool companies in chapter four. Finally, a conclusion and an outlook into the future of the automotive and power tool industry together with supply management in both industries are given in chapter five.

2 Definitions and Classifications

In this chapter, definitions in the field of supply management are provided in section 2.1 in order to establish a common supply management terminology for the benchmarking analysis. After that, the concept and the classification of a supply strategy are introduced in section 2.2. Section 2.3 then gives a critical introduction into supply strategy concepts and in section 2.4 the sourcing strategy triangle is introduced and further explained in the subsections 2.4.1 to 2.4.3.

2.1 Supply Management Definitions

A range of terminologies and definitions exist in the academic and practical literature for activities which are related to supply management; among these are buying, purchasing, procurement, sourcing and supply chain management (SCM). These terminologies are clarified before supply and sourcing strategy definitions are introduced in the next section 2.2. Buying can be defined as the tactical activity for acquiring goods or services and is included in the purchasing function, according to Van Weele (2002).[27] According to Jahns (2005), purchasing stands for operative activities which are focused on buying goods or services.[28] It includes the management and optimization of buying activities and conditions, for instance negotiation price reductions. However, Dobler and Burt (1996) define purchasing in a more strategic way and relate it to the terminology of supply management.[29] Van Weele (2002) speaks about purchasing management and defines this term as a process including all activities which are related to the supplier management.[30] The function of purchasing is typically managed by operative purchasers in most companies. Compared with purchasing, procurement is defined by Van Weele (2002) in a broader way; procurement includes activities and defines corporate processes for ensuring supply management.[31] Van Weele (2002) states that procurement also includes activities which are related to the field of logistics.[32] Nevertheless, Levin (2005) believes that procurement is a tactical activity: “Procurement is a very tactical thing that you do to buy something”.[33] Hugos (2003) also writes that procurement is an operative activity which is included in the field of sourcing.[34]

Van Weele (2002) refers to Vollmann, Berry and Whybark (1984) for a definition of sourcing.[35] According to Vollmann et al (1984), discovering additional sources of supply, managing the continuity of supply, finding additional sources of supply and researching supply knowledge is included in the activity of sourcing.[36] In contrast to this, Hugos (2003) states that “sourcing includes the activities necessary to acquire the inputs to create products or services.”[37] Levin (2005) further divides the field of sourcing into tactical and strategic sourcing.[38] He states in a pragmatic definition that tactical sourcing is “just buying something when you need it” and strategic sourcing is the “hard, methodological, objective approach to try to understand who the right vendor is for your company, and to put a more long-term, large-frame environment around choosing your vendors and maximizing the work you do with your vendors.”[39]

In addition to that, Markham, Tevelson and Houghton (2001) explain strategic sourcing and purchasing in a practical way: “Getting a great price on your copy paper? That’s smart purchasing. Teaming up to buy eggs? That’s strategic sourcing.”[40]

Supply Chain Management is more associated with logistics than the other definitions stated above.[41] SCM is defined by Lambert (2004) as “the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders”.[42] Practitioners primarily link SCM with activities in the field of logistics and not activities from the areas of sourcing and procurement. Jahns (2005) states that the purpose of SCM is the internal and external optimization of the supply chain, in particular the optimization of the value creating process.[43]

Finally, supply management stands for a holistic management approach to ensure supply companywide.[44] It includes the management of the internal as well as external value chain and the thematic fields of sourcing, purchasing and procurement. It is based on a strategic view and a management perspective how supply is managed but also includes operational activities.[45] Supply strategies which are explained in the next section 2.2 are necessary for the long term configuration of supply management activities.

2.2 Classification of a Supply Strategy

According to Porter (1998), a strategy is defined as “[…] a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there“.[46]

A strategy should provide answers to the three questions which are shown in the following figure 5.

Fig. 5: Basic Elements of a Strategy

illustration not visible in this excerpt

Source: Porter (1998), pp. xxvi - xxvii, slightly modified

A supply strategy is therefore defined as a strategy which is based on supply management goals. In addition to that, it should also include the means necessary to achieve these goals. Concerning the terminologies of ‘supply strategy’ and ‘supply management strategy’, these two terminologies are defined as equal in this diploma thesis.

For developing a supply strategy, a company’s actual business at the time of the analysis needs to be clear (‘What is the business doing now’). What is the industry, what is the business model and how does the company solve customer’s problems? Is the company diversifying and are there potentials or is the company refocusing on its core competencies and eventually reducing its horizontal and vertical integration? These questions effect the configuration of a company’s supply strategy.[47]

The second question (‘What is happening in the environment’) is especially important for developing a supply strategy because strategic moves from competitors as well as environmental conditions are major determinants of a supply strategy, in particular political issues and the economical development of the countries in which important suppliers are based.[48]

Finally, the third question (‘What should the business be doing’) deals with strategic alternatives and opportunities. A company coming up with a concept for a supply strategy for instance should question its current supply structure and strategy and should develop suitable strategic alternatives: one example from the automotive industry is the question if it is still a reasonable business case to locate supplier workshops and factories around a car OEM’s production and assembly plant. The same accounts for the power tool and power tool consumable industries.

Before further details about supply strategies are given, a concept for classifying strategies on different organizational levels is explained in order to illustrate the interplay between a supply strategy and strategies on different organizational levels.

According to Jahns (2005), who developed this framework on the basis of Bea and Haas’ (2001) work, three strategy levels can be distinguished which are shown in the following figure 6.[49]

illustration not visible in this excerpt

Fig. 6: Strategic Levels

Source: Jahns (2005), p. 163, slightly modified.

With the use of the Hilti Corporation, these three strategic levels are now explained. Hilti’s corporate strategy is defined as a growth strategy: a continuos growth in revenues with a stable profit margin in the long term.[50]

This leads to two requirements for the business unit strategies as well as the strategic programs: product quality and customer orientation as well as reducing costs to achieve target margins. Generally, Hilti’s organization is structured into the following business units which were already introduced in figure 7: Electrical Tools and Accessories, Direct Fastening, Fastening and Protection Systems, SCM and New Business and Technology which are managed with differentiation strategies[51] based on superior quality and customer orientation. Hilti does not pursue cost leadership strategies in its business units which might be related to Porter’s (1998) findings: Porter (1998) believes that the two generic strategies of differentiation and cost leadership cannot be implemented in the same business unit as these strategies exclude each other because they require each “total commitment and a supporting organizational arrangements”.[52]

[...]


[1] Quotation from the Xerox Commodity Teams in 1986, referenced in Dobler and Burt (1996), p. 211.

[2] Related to the TPS are other management and engineering trends which were mainly introduced by the automotive industry and were also transferred to other industries such as Kanban, Kaizen, Total Productivity Management (TPM), Total Quality Management (TQM), Reverse Engineering and Simultaneous Engineering. See Liker (2004), p. 27 for further details.

[3] The automotive industry was one of the first industries actively pursuing early purchasing involvement (EPI) industry wide which was then copied by other industries. See Womack, Jones and Ross (1990), p. 118 for further details.

[4] See Wildemann (2000), pp. 14 and 15, Van Weele (2002), p. 161, Jahns (2005), pp. 3 - 4, Verespej (2005), pp. 38 - 39 and Dobler and Burt (1996), pp. 214 and 221.

[5] See Schuh, Pfeifer, Klotzbach and Knoche (2005), p. 32, Unknown Author (2004), pp. 40 and 41 and Kuhn (2004), p. 18.

[6] See Geissbauer and Schuh (2004), p. 10.

[7] See Byrne (2005b), p. 28.

[8] See Schuh, Pfeifer, Klotzbach and Knoche (2005), p. 36.

[9] See Geissbauer and Schuh (2004), p. 3.

[10] Anderson and Narus (2000) believe that it is easier for suppliers to increase sales with present customers; therefore they believe this is one of the reasons why a number of suppliers are increasing their degree of vertical integration. See Anderson and Narus (2000), p. 42.

[11] See Trent (2005), p. 53.

[12] The Porsche Boxter, the Boxter S and Porsche Cayman S (which are manufactured by Valmet Automotive in Uusikaupunki / Finland) as well as the Chrysler 300C, the Jeep Commander and the BMX X3 (which were partly developed but are completely assembled by Magna Steyer in Graz / Austria) are examples for contract manufacturing.

[13] Hilti internal document.

[14] See Wildemann (2000), p. 4, Van Weele (2002), p. xiii and xiv and Jahns (2005), pp. 11 and 12.

[15] See Jahns (2005), p. 104.

[16] Jahns (2005) developed the modular concept of the ‘Supply Management Navigator’ in order to structure and manage the functional requirements of supply management within a single framework. See Jahns (2005), p. 70.

[17] See Moser, Weth, Rochel and Weidmann (2005), pp. 2 - 4, Killing (2001), pp. 1 - 4 and Bruch and Bieri (2004), pp. 2 - 5.

[18] See Moser, Weth, Rochel and Weidmann (2005), pp. 2 - 4.

[19] See Hilti Corporation (2005b), p. 2.

[20] Hilti Corporation (2004), p. 8

[21] Hilti internal document.

[22] Porter (1998), p. 39 states that ITW focused on the market for fasteners for particular applications to create switching costs due to their customized products. Nonetheless, the market for fasteners is only a small segment of ITW’s diversified business units.

[23] See Werkzeuge News (2004), p. 1.

[24] Hilti internal document.

[25] See Hilti Corporation (2005a), p. 1.

[26] See Hilti Corporation (2005a), p. 1.

[27] See Van Weele (2002), pp. 14 and 16.

[28] See Jahns (2005), p. 26.

[29] See Dobler and Burt (1996), p. 239.

[30] See Van Weele (2002), p. 17.

[31] See Van Weele (2002), p. 16.

[32] See Van Weele (2002), pp. 16 and 17.

[33] See Levin (2005), p. 1.

[34] See Hugos (2003), p. 76.

[35] See Van Weele (2002), p. 17 and Vollman, Berry and Whybark (1984), p. 148.

[36] See Vollman, Berry and Whybark (1984), p. 148.

[37] See Hugos (2003), p. 76.

[38] See Levin (2005), p. 1.

[39] See Levin (2005), p. 1.

[40] See Markham, Tevelson and Houghton (2001), p. 33.

[41] See Fisher (1997), p. 106.

[42] See Lambert (2004), p. 19.

[43] See Jahns (2005), p. 28.

[44] See Jahns (2005), pp. 29 and 30.

[45] See Jahns (2005), pp. 29 and 30.

[46] See Porter (1998), p. xiv.

[47] See Porter (1996), p. 74.

[48] Jahns, Hartmann and Lockström (2005) state that political instability is the major risk which was identified by CPOs for the field of LCC sourcing. See Jahns, Hartmann and Lockström (2005), p. 18 for further details.

[49] See Jahns (2005), p. 163 and Bea and Haas (2001), p. 165.

[50] Hilti internal document.

[51] Porter (1998), p. 9 states that a product differentiation strategy is based on brand identification and customer loyalties. In the case of Hilti, this is related to a superior customer service and product quality.

[52] The strategies of being a low cost producer and achieving differentiation are seldom compatible, according to Porter (1998), p. 35 and Porter (1985), p. 11.

Excerpt out of 75 pages

Details

Title
Benchmarking supply strategies in the automotive and the power tool industry
College
UNITEC New Zealand  (Supply Management Institute (SMI))
Course
Diplom
Grade
1.7
Author
Year
2006
Pages
75
Catalog Number
V79125
ISBN (eBook)
9783638019972
ISBN (Book)
9783638922708
File size
1064 KB
Language
English
Notes
Problem Definition: lack of published supply strategy research, no published supply strategy benchmarking approach between the automotive and the power tool industry could be identified Objectives: The main objective was to benchmark supply strategies in the automotive and the power tool industry and to develop recommendations for the Hilti Corporation. Due to the complexity of supply management, a scope was set on sourcing strategies within the field of supply management
Tags
Benchmarking, Diplom
Quote paper
Andreas Weth (Author), 2006, Benchmarking supply strategies in the automotive and the power tool industry, Munich, GRIN Verlag, https://www.grin.com/document/79125

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