Volvo to cut back on smaller suppliersThe economic downturn is affecting everyone, and companies looking to cut costs are searching high and low for places to trim the fat. For at least one company, that may mean pruning down the size of its supply chain.

Volvo Cars, the Swedish automaker owned by China's Zhejiang Geely Holding Group, may cut its supplier base by as much as 33 percent, purchasing chief Bernt Ejbyfeldt told Bloomberg this week.

Volvo, which currently works with approximately 450 suppliers, is looking to reduce costs and simplify manufacturing by cutting that number down to around 300. The company's 20 largest suppliers, which provide it with almost 70 percent of its parts, stand to gain from the change, while smaller European suppliers will be slowly phased out. The process, which has yet to begin, is expected to take three to four years.

"We have a lot of small suppliers, and we want the right ones that will focus on us as a company," Ejbyfeldt said.

Volvo hasn't turned a profit since 2005, but recent marketing stunts in movies such as the famous "Twilight" series are hoping to reverse that trend. Volvo CEO Stefan Jacoby seeks to double sales to 800,000 cars annually over the next decade as the company rolls out new models for many of its automobile lines.
Share To:

Strategic Sourceror

Post A Comment:

0 comments so far,add yours