A NEW APPROACH TO STRATEGIC PARTNERSHIPS IN ASSOCIATION WITH
VOLVO CARS
DIGITAL REPORT 2020
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VOLVO CARS: A NEW APPROACH TO STRATEGIC PARTNERSHIPS w w w.vo l vo c a rs . com
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Michael Perkins, Director of IDP Global Procurement at Volvo Car Group, discusses the evolution of the company’s holistic approach to strategic partnerships
S
tarting his career in the procurement industry in the early 90s, Michael Perkins has roughly 30 years experience in the sector.
Currently, Perkins is a Director at Volvo Cars in charge of the EMEA region, as well as setting the structure globally for the company’s digital and IT services, 04
marketing and sales, and professional services in procurement. “In 2016, following a 26 year career in procurement I was looking for new opportunities. Whilst looking, I was contacted by a recruiter on behalf of Volvo Cars, who were looking to establish the company in South Carolina. I’d never worked in the automotive industry and saw this as an incredible opportunity - the thought of bringing a Swedish automaker owned by a Chinese holding company to the US intrigued me,” says Perkins. “Volvo Cars is an amazing company,” comments Perkins. “We are a very progressive automotive manufacturer; we are agile, creative and extremely people-driven. We also have the ability to adjust our paths faster than other premium automotive manufacturers due to our size, however we are still big enough that people are taking notice of what we are doing
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“ We are a very progressive automotive manufacturer; we are agile, creative and extremely people-driven” Michael Perkins, Director of IDP Global Procurement, Volvo Car Group
and wanting to be a part of it. Ultimately at Volvo Cars we strive to provide people with the tools to move in a sustainable and responsible way.” Further discussing sustainability, Perkins emphasises that this is something which to this day is at the core of Volvo Cars’ operations dating back to its founders. In order to drive sustainability within its operations, Volvo Cars has set what Perkins believes to be one of the most ambitious climate plans in the automotive industry. “We aim to reduce our CO2 emissions by 25%
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per car by 2025, with a long-term goal of becoming climate neutral by 2040 across the full value chain.” When it comes to sourcing and procurement trends within the automotive industry, Perkins has seen the expectation of greater margins emerging as a challenge. “With this in mind it is critical for us to create strong partnerships with our suppliers, when we work together it’s not just about cutting costs, it’s also about improving our cross collaboration between internal stakeholders and procurement,” comments Perkins. “It all starts with collaboration. For our sourcing and procurement strategy we need to establish trust between each other
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07 and determine what is needed, in order
talking about is strategic, not favoured,
to ensure we source the right partners to
sometimes this can get blurred. I am
fulfil the requirements. We also have to
talking about someone that has our
be comfortable with the realisation that
interest in mind, but they will also chal-
we don’t know everything, and look to
lenge us and the status quo. We work
our suppliers to help improve cost opti-
jointly with our partners not only in the
misation and operational efficiency.”
successes but in the failures too,” com-
When searching for a strategic partner,
ments Perkins. When it comes to Volvo
Volvo Cars looks for companies that not
Cars’ approach to partnerships, Perkins
only have a proven track record within
describes it as holistic, “similar to what
the industry, but companies that also
I have previously discussed, when we
align with Volvo Cars’ beliefs and values.
look to source our suppliers we have a
“I think when we are looking for strategic
common target, something which we
partners - firstly they’re critical to our
are looking to achieve. Taking a holistic
success - but let me be clear what I am
approach creates a group of suppliers w w w.vo l vo c a rs . com
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that we can rely on and innovate with in
on this new approach, Perkins has
the hopes to deliver ‘best-in-class’ plans,
seen Volvo Cars’ landscape supplier
processes and products.”
landscape change. “When we started
With this approach in mind, Volvo
this project we had hundreds and
Cars established a cross functional
hundreds of suppliers covering our
team. “I would say this was the first
11 areas that we were dependent on,
time in the organisation where we
creating dependency issues, lack of
approached mega sourcing in the
efficiencies, governance and supplier
proper way by establishing a cross
management tools. With this change
functional team of decision-makers,
of approach we were able to reduce
project leaders and subject matter
the majority of our supplier base to four
experts. This allows us to be flex-
main suppliers, which are helping us
ible and adjustable to meet desired
to remove dependency, improve effi-
results,” comments Perkins. Reflecting
ciency, and implement governance and
performance management tools.
holistic approach and collaborating with
This was a huge transformation for us.”
our partners will drive ‘best-in-class’
Volvo Cars’ four strategic partners
outcomes if we utilise each of them to
include Capgemini, HCL, Cognizant and
their strengths. Capgemini was selected
Infosys. “As a whole, any one of them
for our manufacturing, logistics, finance,
could have taken on the entire transfor-
hosting, HR, facility, legal and security,
mation project. However, like I previously
while HCL is our partner for product cre-
mentioned, we believe that taking a
ation, research development, IP assets,
E XE CU T I VE PRO FI LE
Michael Perkins Michael has a wealth of experience in expense management within a multitude of industries, including insurance, real estate, technology, legal, human capital, and private equity, to name a few. For over 15 years, Michael was a partner with Profit Recovery Partners, a professional services firm that develops, implements, and manages cost-reduction solutions. Michael joined Volvo Car Corporation in April 2016 to help establish and launch its first manufacturing plant being built in the US. This included the overall responsibility of Machinery & Tooling, Logistics, Facilities Management, IT, Marketing & Sales, Professional Services, etc. After two years in the US, and completing the launch, Michael moved to Sweden to join the indirect procurement management team. In his current role, Michael is responsible for the EMEA region as well as driving global direction in the areas of Marketing & Sales, CED (IT), and Professional Services. w w w.vo l vo c a rs . com
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end user and collaboration environments, Cognizant is our partner for data management, analytics, monetisation and automation, and finally Infosys to support the delivery and transformation in our commercial operations.” In addition to transforming its strategic partnership strategy, Volvo Cars has been digitally transforming its business functions and operations to become more agile. “Currently within the automotive industry, I would say there is a huge
“With this change of approach we were able to reduce the majority of our supplier base to four main suppliers, this was a huge transformation for us” Michael Perkins, Director of IDP Global Procurement, Volvo Car Group
focus on electrification, autonomous 13
driving, customer relationships and
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CAPGEMINI
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Capgemini is a global leader in consulting, technology services and digital transformation, at the forefront of innovation to address the entire breadth of our clients opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organisations to realise their business ambitions through an array of services from strategy to operations. We have been working for more than 40 years with Volvo Cars, in different programs, supporting both the IT organisation as well as the Business side of Volvo Cars. Since last year we have been chosen as the main Digital transformation partner for Enterprise Digital. Our Motto for the partnership is “Guide – Enable – Deliver”. We guide Volvo Cars by leveraging our industry knowledge and expertise to provide insights to Volvo Cars on some of their strategic topics, we help enable Volvo Cars’ strategies
to make sure implementations can accelerate, and we strive to deliver current services as well help in transforming its IT landscape into a future proof and agile IT environment. As part of the new agreement, Capgemini will deliver a wide range of transformation services including product orientation, DevOps and cloud. In addition, Capgemini will be a main provider of end-to-end SAP consulting and technology services (including new SAP S/4HANA® implementation projects, application management and support, and infrastructure/ platform services). In the last few years the intensity of the relationship has started to change. Rather than just delivering IT services, our relationship with Volvo Cars has started to focus more on the business impact both parties could deliver through the IT services provided to the business. — Frank Wammes, Global Account Executive, Capgemini
HCL
HCL Technologies (HCL), is a leading next generation global technology company that helps enterprises reimagine their businesses for the digital age. Our technology products, services and engineering are built on four decades of innovation, with a world-renowned management philosophy, a strong culture of invention, risk-taking, and a relentless focus on customer relationships. HCL’s engagement with Volvo Cars is the expansion of a partnership that began in 2016 and will see HCL continue to support the global premium car company through its ongoing digital transformation initiatives. This large-scale transformation exercise includes organization-wide technology shifts that will help Volvo Cars capitalize on new opportunities to improve internal business processes and customer experiences. The relationship between the two organizations is driven by the key tenets of trust-transparency-flexibility, value centricity and is based on HCL’s philosophy of relationship beyond the
contract™. The partnership is now expanding to the next level and is moving into digital transformation, including product orientation, DevOps and application integration. As an industry-leading global engineering services provider, HCL Technologies will also help Volvo Cars strengthen their competitive advantage, through an integrated transformational strategy that facilitates continuous quality & cost improvement across the product creation value stream, while accelerating revenue growth t hrough innovation. Leveraging HCL’s combined strengths in PLM and electronics and engineering IT, we are bringing together a blend of traditional and next generation global engineering services and global engineering solutions, enabling Volvo Cars to achieve productivity targets in coming days and race ahead of the competition. — Anirban Dutta,, Client Partner, HCL Technologies, Sweden
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vehicle communication. With these fast growing trends it is crucial for us to develop strategic partners with the expertise to develop and utilise innovative technologies such as artificial intelligence, machine learning, big data and analytics in order to stay ahead of these evolving trends.” Reflecting on the company, Perkins has seen Volvo Cars since 2018 evolve from manufacturing cars in Europe and China, into an auto manufacturer with systems and governance in global 16
positions. Perkins believes that Volvo Cars’ biggest strengths are its line-up of vehicles which have been completely
“ Taking a holistic approach creates a group of suppliers that we can rely on and innovate with in the hopes to deliver ‘best-in-class’ plans, processes and products” Michael Perkins, Director of IDP Global Procurement, Volvo Car Group
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redesigned to remain competitive and lead the premium car market, as well as its commitments to sustainability with its electrification lineup and its leadership team that isn’t afraid to cause a disruption in the industry. “I would also say our biggest success is our strong presence within the industry maintaining our ability to sell over 700,00 cars in 2019 in a declining market, which I think is pretty incredible,� concludes Perkins.
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