Strategy Consulting
Audi AG
New Audi plant in Mexico: Ingenics makes a mark in supplier development
A situation where early supplier development is crucial
Audi AG opened its first plant on the North American continent in the Mexican state of Puebla. Ingenics was able to contribute to the successful launch of SUV production on several levels. The task of supplier development was of particular importance: over a period of 18 months, more than 40 suppliers were managed in a project to construct new plants in the immediate vicinity of the new factory in addition to around 20 suppliers involved in upgrading existing factory buildings.
- Overview of supplier localization – first point of contact
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Transparent project reports by comparing project schedules and actual project status (tracking)
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Consideration of criteria relating to planning and realization when assessing project status (factory and staff)
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Reliable localization of supplier structures – compliance with quality and deadline targets
Ingenics was involved on several levels in the project to establish Audi’s first independent production network in North America, from factory and production planning to supplier development.
In early 2017, Audi Mexico began producing the Q5 – one of the most successful models in recent years – for the entire global market in San José Chiapa, a town in the state of Puebla. The company aims to manufacture 150,000 of these SUVs each year on a newly developed site covering a good 460 hectares (1,137 acres) and comprising a press shop, body shop, paint shop, assembly lines, and a logistics center.
Supplier development was a particularly important issue given that as many as 16,000 of the approximately 20,000 new jobs created were with suppliers, many of them located in the immediate vicinity of the new factory. The strategy of the premium car manufacturer was to create optimal conditions for the start of production, ensuring not only that its in-house production facilities were online, but also that all supplied parts would be available in the required quantity from the outset. To this end, each supplier needed to launch production with a high level of synchronization.
A multi-stage supplier development program was put in place to make sure that the relevant companies would be able to meet delivery requirements in terms of quality and scope. Based on the global experience of Ingenics AG in factory planning, two core components were identified: planning assembly and the logistical supply chain with appropriate qualification measures, and the task of supplier development.
The latter had initially been conceived as nothing more than greenfield planning because the majority of parts were to be produced by local suppliers. However, it turned out that some suppliers were already operating factories in other regions of Mexico that met the essential requirements but lacked the necessary capacity. These companies did not have to relocate closer to the factory, but like all other suppliers they were subject to monitoring based on processes developed by Audi together with Ingenics.
Audi had provided Ingenics with a basic concept to determine how factory construction should be tracked for future suppliers. Accordingly, Ingenics guided potential suppliers toward key milestones such as “approval process complete” and “weatherproof hall” as work progressed. In total, 17 project phases had to be managed and brought to a close with checklists to document their success.
Between spring 2015 and late summer 2016, Ingenics supported more than 60 suppliers on their journey into Mexico, each of which was facing an investment in the millions. In any case, a kick-off event was held at the outset to explain the monitoring system and to commit potential suppliers to the specified milestones. Each step had to be documented on time (e.g. with photographs) and either confirmed by planning documents or verified by a visit by Ingenics.