The Study On Project Management Of FAW-Volkswagen's Localized-Component Outsourcing

With China's entering WTO, auto manufacturing enterprises are facing severe challenges, so that more and more auto makers have recognized that it is the important way on gaining maximum profits to enhance project management on procurement of outsourcing localized components with transformations of traditional procurement philosophies and modes. Healthy system of procurement management promotes directly increasing on profits and values of enterprises, and upgrades competitive market capabilities of enterprises. The procurement project management of localized-component outsourcing of FAW-Volkswagen is one of the critical executions of its general project management. With execution of the project management for three types of the procurement projects (as for the existing models, face-lifted models and new models), planned targets of timing, quality and cost of the various project shall be smoothly guaranteed in order to ensure its competitive power in the industries and gain its best product performance-to-price ratio while facing shortening project cycle time, increasing cost-drop pressure and stinging market competition. One of the important functions of FAW-Volkswagen Purchase & Supply is to handle the local-content project management, and to organize localized-component outsourcing as well, which focus on forward purchase, manufacture-preparation tracking and batch-production purchase. Forward purchase: local-content programming for localized-component outsourcing, selection of potential suppliers, organization of technical presentations, tendering and bidding coordination, analysis and conforming of price and supplier ascertaining.Manufacture-preparation tracking: clarifications of manufacture-preparation timing for every sub-project with suppliers, tracking of product OTS, batch acceptance (first-batch sample acceptance, production process verification and batch production acceptance) and adoption of localized components.Batch-production purchase: procurement-contract and annual-order placing with suppliers, annual cost-drop fulfillment, and annual evaluation in coordination with Quality Assurance, Production Management, Sales Services and Financial.According to the five grades of OPM3-Organizational Project Management Maturity Model, procurement project management of localized-component outsourcing of FAW-Volkswagen is only staying between Level 1 and 2, for the existing potential restricting factors out of its organization of procurement system have caused scarcity of real project management, scarcity of corresponding project management procedure and perfect procurement process to support various kinds of project management, unconformity of utilizable resources, incompletion of information management system, absence of purchasing-cost control for localized components, inconsummation of measures for quality target realization.For improvements of procurement project management of localized-component outsourcing, it is necessary, starting from reformation of the existing organization and reconstruction of the existing procedure, to promote the core function of project management in procurement system, to establish new procurement procedure while optimize the existing flow (like procurement flow for product engineering, associated procurement procedure, global sourcing process and some other auxiliary procedures).Improvements on processes of procurement project management of localized-component outsourcing show the features project target of localized-component outsourcing, including procurement project of localized-component outsourcing at new model launching, cost-drop project of localized-component outsourcing for the existing models, and project timing target of localized-component outsourcing for model face-lifting, cost target and quality target. Integrations with project timing target and cost target, integrations with project programming and the national industrial polices, continuous development of project program, perfection of project-timing tracking control with u...