AutoRevista.- How have the first few months of activity been for PSA Group’s new purchasing organisation?
Yannick Bézard.- Ever since the integration of Opel and Vauxhall in PSA Group on 1 August 2017, everything has moved quickly in the purchasing area, as just five months later the Global Purchasing and Supplier Quality Department was created, which manages both the purchasing of the historical PSA Group, known as PCD (Peugeot, Citroën and DS), and that of the new brands, OV (Opel/Vauxhall). On 15 December 2017, it was announced that 1,100 people, who were part of the PCD team, would merge with 700 OV collaborators. This new department has been in operation since 1 January.
This new organisation’s aim is to increase PSA Group’s efficiency and purchasing power through economies of scale and value creation, thus boosting competitiveness. In the mid term, 30% of the synergies derived from the purchase of OV by PSA Group will come from purchasing.
Relations with suppliers have simplified with the launch of single contact persons with a significant amount of business. The new entity will represent an annual purchasing volume of 38,000 million euros in Europe.
The aim from the beginning was to define a highly operative organisation involving all operators, whilst also preserving their place of work and their working conditions. The philosophy was based on doing something simple in order to be fast and efficient. Both of the Group’s areas are immersed in two profitable growth plans, “Push to Pass” for PCD, which covers the 2016 to 2021 period with a important meeting at the end of 2018, and more recently the project “Pace!” centred on Opel/Vauxhall’s return to profitability, which focuses on the coming three years.
“Both of the Group’s areas are immersed in two profitable growth plans, “Push to Pass” for PCD, which covers the 2016 to 2021 period"
Up until now, we have carried out important joint projects such as the Opel Grandland X, the Peugeot 3008, the Opel Crossland X and the Citroën C3 Aircross, and experience tells us that the plan that has been drawn up is the right one.
The priority was to have one single contact person for our suppliers and it was very important to quickly consolidate the whole sphere in the same person. This may seem like a reduction of responsibility, but, in reality, it is greatly enriching because of the breadth required by having a second manufacturer, due to the international scale, which is different for both manufacturers, making the purchasing role hugely enriching.
“Relations with suppliers have simplified with the launch of single contact persons with a significant amount of business”
The aim is also to be committed to team spirit,which is what has contributed to PSA’s return to profitability with the “Back in the Race” plan upon the arrival of Carlos Tavares. This solidarity between the different teams — those that are dedicated to manufacturing, design, purchasing or transport — is also easily identifiable among Opel teams.
AR.- How is the Opel/Vauxhall structure being integrated to attain 30% joint purchases?
Y.B.- The spirit that drives us is a little like that of a musketeer. We are all dedicated to cost reduction and business efficiency, gaining profitability by consuming the smallest amount of resources possible. This spirit has been a part of Opel/Vauxhall since August 2017. Breaking down silos and orienting all roles towards the same objective is something that has brought the Opel/Vauxhall teams together since early on, guided by the CEO Michael Lohscheller. It is not something unique and exclusive to purchasing, the same formulas give the same results.
Cost savings are obtained in two ways: an overall goal for the new union of 1,700 million synergies by 2026 and 700 euros per vehicle by late 2020 for Opel. For the figure of 1,700 million, which has not been broken down between PCD and OV, purchases should represent around 500 million euros.
AR.- What requirements does PSA Group demand from its suppliers to respond to the trends currently transforming the industry?
Y.B.- This new organisation will not cease to have an impact on our suppliers, who have already adjusted their organisation by naming an account manager to cover the five brands. We won’t necessarily reduce the number of suppliers. What can be reduced, however, is the number of sites from which parts are supplied. Peugeot, Citroën and DS in Europe obtain their supplies from close to 2,000 factory suppliers, which is already quite substantial. Opel /Vauxhall is more or less in the same order of magnitude.
“We won’t necessarily reduce the number of suppliers. What can be reduced, however, is the number of sites from which parts are supplied”
Streamlining must take place, which will transpire at the speed at which it takes the Group’s factories to adapt to two single platforms. On the one hand, there is the CMP (Common Modular Platform) for urban vehicles, hatchbacks with a high volume of sales and compact SUVS. The e-CMP electric version will mean a new generation of spacious, multi-purpose electric vehicles can be offered, which will have a maximum driving range of 450 km and ultra-fast charging solutions providing up to 12 km of driving range per minute of charging. Four electric versions will hit the market from now until 2021, the first of them in 2019.
By 2025, 100% of our models will have an electric version. The second platform, EMP2 (Efficient Modular Platform), will offer the first plug-in hybrid petrol models from 2019.
This alignment in any of the two platforms will create the effect of a volume increase, which will allow us to use the same component throughout the whole range, since they concern modular architectures. A vehicle’s rear camera, for example, can be the same for everything from an entry-level range to a luxury range for the five brands.
The autonomous car is a technological feat that will arrive in phases. The first automated functions are already available in recent launches, incorporating state-of-the-art driver assistance systems, such as in the case of the DS 7 Crossback, which reaches level 2 of autonomous driving.