Guest Lecture, Purchasing at the industry (Volvo)

Question 1

what is purchasing bout, name some key-points!

Answer 1

1. communication
2. working cross-functional
3. long term relationships
4. positioning
5. analytics
6. trust
7. etc.

Question 2

In what way the Volvo group organization changed?

Answer 2

To become more brand and customer focus

Question 3

why Is purchasing important?

Answer 3

easier to increase margin by lower costs than increasing sales

Question 4

what are the 2 main assets within trucks purchasing?

Answer 4

1. people

2 has supplier

Question 5

what do they use for creating risk profile?

Answer 5

1. risk analysis
—> leverage products
—> routine products
—> bottleneck products
—> strategic structures 
2. SWOT
3. 5 forces

Question 6

why sustainable purchasing?

Answer 6

1. project and enhance brand reputation
2. operation benefits
3. 4.
   5.

Question 7

What does SAQ cover?

Answer 7

1. company management
2. working conditions and human rights
3. business ethics
4. environment?
5. supplier management
6. responsibilities
7. responsible sourcing of raw materials

Question 8

namne some challenges within purchasing?

Answer 8

1. innovation
2. knowledge management
3. blockchain
4. digitalisation
5. capacity management

Question 9

What is purchasing about, except decreasing cost?

Answer 9

1. creating value
   —> delivering the right QDCF
   —> bringing innovation
   —> reducing crash conversion cycle
2. About decreasing the total cost / Value of ownership

3. defining:
—> what
—> how
—> where
—> whom

Question 10

what are the purchasing interfaces?

Answer 10

INTERNAL
— sustainability
— engineering
— quality
— legal
— operations
— logistics
— after market
— other BA/Bus
— Finance and business control
— projects
— processes
— brands

EXTERNAL
— geography, markets and culture
— suppliers

Question 11

Key-innovation areas for long-term technology development?

Answer 11

1. co2 and energy efficiency
2. safety, automation and driver environment
3. transport solutions
4. manufacturing technologies
5. electrical embedded system technologies
6. lightweight solutions and sustainable materials

Question 12

what are the key challenges for purchasing?

Answer 12

1. secure strategic fit when it comes to mission, vision, aspiration and values
2. long-term profitability:
   —> strategic alignment with suppliers to get access to latest technologies
3. Secure footprint of supplier base
   —> total cost of ownership
   —> regional value content regulations
   —> environmental impact
4. Secure leverage short and long term within segments and across Volvo group supplier base

Question 13

product life-cycle?

Answer 13

1. segment strategy
2. sourcing
3. industrialization
4. mass production
5. end of life

Question 14

what is a segment strategy within Volvo?

Answer 14

1. assessment of our needs and drivers for a particular set of parts or services
2. assessment of the supplier market and trends in the industry
3. a process to align cross functionally what we would like to achieve and with what suppliers from current state and up to 5-10 years horizon
4. outcome should include:
   — supplier base now and in the future
   — main actions to achieve wanted position
   — key success factors for the strategy

Question 15

What are porters 5 forces

Answer 15

1. Threat of new entrants
2. Determinants of supplier power
3. Rivality among existing firms
4. Determinants of buyer power
5. Threat of substitute product

Question 16

Questions for risk analysis?

Answer 16

1. what are the risks of failure of the sector?
2. What is the difficulty to switch?
3. if the high risk identified for the segment, what is the exit strategy?
4. estimate tje opportunity to create value by managing risk
   —> e.g. dual sourcing for mitigation?

Question 17

supplier selection process?

Answer 17

1. segment strategy
2. request for quotation
3. XFC?
4. PUGH matrix
5. Decision

Question 18

Describe the basic concepts of sustainable purchasing

Answer 18

1. People
—> human rights
—> diversity
—> labour relations
—> worker's right
—> community and education

2. Planet
—> Environmental management
—> pollution prevention
—> natural resources
—> climate change and global energy issues

Profit
—> economic growth
—> research and development
—> shareholder return
—> business ethics