2007 Reference document (PDF) - Valeo

4.3.1. Purchasing
The role of Valeo’s Purchasing team is to reduce supply costs
through increased sourcing in competitive-cost countries,
implement rigorous selection processes for new suppliers,
apply the total quality and innovation approach to suppliers
and sub-contractors and establish close partnerships with
the most innovative and best performing suppliers, in order
to turn this strategy into a genuine competitive advantage.
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The Purchasing network covers all activities linked to supplier
integration. Suppliers are divided into purchase families for
products and services from raw materials to electronic, mechanical
and plastic components, etc. The ten Valeo Product Families each
have their own purchasing networks and there is a separate
purchasing team for every Valeo site. The different Product
Families are coordinated by Group Lead Buyers (based at the sites,
these buyers coordinate and harmonize the purchasing policies
of the different Valeo Divisions for which a given supplier works)
and Group Commodity Leaders, who are responsible for strategy,
as well as a panel of suppliers for each purchase family.
Valeo deploys resources to help its suppliers improve their own
quality processes. The Group’s QRQC approach continues to be
implemented to assist suppliers in achieving zero defects. In 2007,
210 suppliers were thus trained in this method.
“Supplier Relationship Management” (SRM) is an essential
tool in the relationship between Valeo and its suppliers. SRM
is a secure extranet resource. Modules such as the Incident
Management System and Supplier QCD monitoring (reporting
back to suppliers on their performance in terms of quality, cost
and delivery) can be accessed on the extranet, enabling Valeo
and its suppliers to work closely together and share standardized
processes, for example, in order to identify and process quality
incidents rapidly.
By working with fewer suppliers, Valeo is better able to support
them in their quality strategies. The Group has thus retained
the best suppliers in terms of quality, technology and productivity.
In 2007, despite the addition of 150 additional suppliers due to
the change in consolidation scope, the Group reduced the number
of its suppliers by 40 to reach a total number of 2,574 (see Key
Events - Strategic Operations).
In 2007, Valeo pressed ahead with Convergence, a program
designed to engineer a dramatic cost reduction while improving
the quality of products produced by our suppliers. The system uses
a specific monitoring tool, the Scorecard which provides a visual
indication of quality performance and cost reductions implemented.
It also provides three-year visibility of developments and areas
of potential productivity, as well as indicating where such areas
have not yet been identified. Each supplier Scorecard is monitored
by a Group Lead Buyer (see above). In 2007, the Convergence
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2007 Reference document - VALEO
Activity
The Group
program involved 245 Valeo suppliers, representing 46% of Group
purchasing. The program is complementary to the VIP program.
Launched in 1999, Valeo Integrated Partners (VIP) program, covered
80 suppliers in 2007, including suppliers from competitive-cost
countries. In exchange for an undertaking from its suppliers to
continuously improve operational performance, Valeo offers
these partners greater volumes and business opportunities.
With the launch of its new Code of Ethics, Valeo further tightened
the requirements imposed on its suppliers in terms of labor rights
and environmental protection.
Innovating and designing products using different materials and
new architectures can also help improve quality and reduce costs.
Presentations to identify supplier innovations are organized on a
regular basis.
Valeo increased purchasing in low-cost countries.
These purchases represented 37% of total production purchases
in 2007 (compared to 33% in 2006). This result was achieved
with the contribution of all Valeo teams as well as those of Valeo’s
APO (Asian Purchasing Office) in Shanghai, which employs
around forty people.
4.3.2. The Valeo Production System and logistics
The role of the Valeo Production System (VPS) is to improve
product quality and customer service while at the same time
reducing production costs and long-term assets. At the heart
of this strategy lie the optimization of the industrial footprint
and the deployment of a Total Quality Culture.
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In 2007, Valeo continued to implement both its plan to standardize
processes and equipment, using the Kosu approach to measure the
resources required to manufacture a part, and also its investment
optimization strategies. These operational standards make it
possible to capitalize on experience, cut product development
lead times, stabilize new production lines quickly while avoiding
start-up problems, and cut costs at every stage of the process.
All activities are now carried out using standards that supervisors
must ensure are respected and improved. On the shop floor,
performance is monitored in real time through a concrete analysis
of what really happens on the production line. Problems are
identified, immediately processed and turned into opportunities
for improvement. Each operation is assessed for its contribution
to the added-value of products, and operations lacking in this
respect are eliminated.
The ergonomic design of workstations continued to be improved.
Each workstation is organized around the needs of operators, who
have made significant contributions to improving their comfort and
safety at work. This approach is also part of Valeo’s Occupational
Health and Safety policy (see also section 4.2.3. “Health & Safety”
of section 4 “Functions”). It helps reduce the number of accidents
at the Group’s production sites.
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