Vw Versus Gm

Volkswagen versus General Motors: Achieving Supply Chain Excellence

Robert D. Skelton

Webster University

Abstract

General Motors (GM) and Volkswagen (VW) operate in a highly competitive industry, requiring optimized strategies that reduce costs, increase efficiency, and meet the meticulous demands of customers of varying needs. GM’s well known supplier difficulties (witness recent issues identified by Delphi regarding the highly publicized ignition switch problems) may contribute to many of the challenges faced by GM in its efforts to regain sustained dominance in global auto sales. This paper will explore the perceived successful supplier relationships of VW and assess if GM would benefit from adopting a strategy similar to VW’s to improve its reputation, restore consumer confidence, and increase global sales.

Volkswagen versus General Motors: Achieving Supply Chain Excellence

Much has been made of GM’s recent issues related to faulty ignition switches that have been linked to a number of deaths and have led GM to establish a claims review process to address unresolved past claims and any future claims. While no auto manufacturer is immune from the possibility of consumer harm from faulty parts or manufacturing processes, GM’s problem may have been evident early enough to have prevented the problem. May the source of such problems be tied to poorly developed relationships with parts suppliers? Does a model for the manufacturer/supplier relationship exist that would better serve GM’s efforts to retain global dominance in the automotive industry?

VW: Global Dominance by 2018?

VW’s well known objective of achieving status as the sales and profit leader by 2018 appears to be achievable given recent sales numbers. According to Forbes (Muller, 2013), VW achieved an earnings margin of over 13% in 2012, far exceeding the necessary 8% growth margin to become the worldwide profit leader by 2018. The capacity to generate such sales numbers across a...