Mercedes - Strategic realignment of Procurement and Supplier Quality

Mercedes-Benz Cars drives the CASE transformation forward with the international supplier network


Strategic realignment of Procurement and Supplier Quality: Mercedes-Benz Cars drives the CASE transformation forward with the international supplier network




    The implementation of the CASE strategy is crucial to the success of Mercedes-Benz Cars.


    Wilko Stark, Member of the Divisional Board of Management of Mercedes-Benz Cars for Procurement and Supplier Quality: “Procurement makes a significant contribution to the implementation of the CASE strategy at Mercedes-Benz Cars by working together with suppliers at a very early stage in the development of innovations. After placing an order for battery cells for 20 billion euros to safeguard our electric offensive, we are taking further steps at Procurement and Supplier Quality to continue pushing forward with the transformation of Mercedes-Benz Cars.”


    Procurement is addressing the following core issues: Together with the supplier network, Mercedes-Benz Cars is driving CASE innovations forward, further expanding the international supplier network and creating greater planning security in the supply chain through increased flexibility. Together, the partners achieve more efficiency by means of technical innovations without sacrificing sustainability.




Mercedes-Benz Cars is taking the next step in the implementation of the CASE strategy and is making its supplier network even more international. Together with the suppliers, procurement is driving the innovations of the future. The company already plays a leading role in all four areas of Connectivity, Autonomous, Shared & Services and Electric.



Wilko Stark, Member of the Divisional Board of Management of Mercedes-Benz Cars for Purchasing and Supplier Quality since October 2018, is implementing the future trends that he identified as chief strategist: “Procurement makes a significant contribution to the implementation of the CASE strategy at Mercedes-Benz Cars by working together with suppliers at a very early stage in the development of innovations. After placing an order for battery cells for 20 billion euros to safeguard our electric offensive, we are taking further steps at Procurement and Supplier Quality pushing forward with the transformation of Mercedes-Benz Cars.”



Procurement is addressing the following core issues: Together with the supplier network, Mercedes-Benz Cars is driving CASE innovations forward, further expanding the international supplier network and creating greater planning security in the supply chain through increased flexibility.


Together, the partners achieve more efficiency by means of technical innovations without sacrificing sustainability.



Purchasing drives CASE innovations forward with the supplier network



Procurement and Supplier Quality at Mercedes-Benz Cars works closely with suppliers in the CASE fields and drives tomorrow’s innovations. Through permanent innovation scouting in the existing supplier network and with new players and startups, innovative ideas are generated over the entire lifecycle for hardware, software and services. The aim is to bring these innovations into Mercedes-Benz vehicles even faster.



With extensive orders for battery cells until the year 2030, another important milestone has been set for the electrification of the future electric vehicles of the EQ product and technology brand. Together with supply partners, this will ensure that the global battery production network is supplied with the latest technologies today and in the future. Thereby, the expansion of the supplier network will be driven forward.




Expansion of the international supplier network



Mercedes-Benz Cars is continuing to expand its international network of suppliers and is systematically pursuing its strategy of purchasing wherever its vehicles are produced. By intensifying its localization strategy, Mercedes-Benz Cars is making itself more independent of political developments such as trade conflicts. “At Mercedes-Benz Cars, we generally aim to increase the degree of localization wherever we produce.



A central building block for this is the local proximity of suppliers to the production plants, so that parts can be produced and called up almost synchronously with production. We are already working with many global partners to achieve this. We give local and new partners the opportunity to position themselves with us internationally,” says Stark.



In China to date, approximately 300 local suppliers have been successfully developed. The proportion of local sourcing for production at the US plant in Tuscaloosa is higher than the current requirements in the country and is scheduled to be significantly increased over the next five years.



Flexible purchasing at Mercedes-Benz Cars



Growing flexibility in the supplier network is required not only by the transformation to electric mobility, but also by volatile markets, by Mercedes-Benz Cars’ wide product range with more than 40 models, and by the high variance of ever new functions.



“We work in close partnership with our suppliers so that we can meet individual customer requirements flexibly, also with short-term change requests. Together with our partners, we have made our supplier network more flexible in order to compensate for fluctuating volumes. We are not cutting back on Mercedes-Benz top quality,” says Stark.



A prerequisite for supplying the flexible Mercedes-Benz Cars production strategy, which can switch between conventional and electric vehicles, is an equally flexible supplier network to supply the Mercedes-Benz plants. By bundling orders for components for conventional and electric vehicles with the same supplier, for example for seats or head units, it is possible to react flexibly to customer demand and switch between the drive technologies.


This provides greater planning security for suppliers and for Mercedes-Benz Cars. Procurement and Supplier Quality helps the supplier network to align itself flexibly and efficiently with the future requirements.




More efficiency through partnership-based target-cost achievement



Another lever for greater efficiency is technical innovations that are developed jointly with suppliers. “Our global supplier network makes an important contribution to value creation, quality and innovation. By means of early integration with continuous improvements along the value chain, it makes a decisive contribution to the overall business success of Mercedes-Benz Cars. In the future, we intend to make even greater use of our suppliers’ modular systems for parts that do not differentiate our brands. Our suppliers therefore have a significant influence on the development of our component costs,” says Stark.





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