In July 2018, Amir Bell was heading the Operational Excellence (OpEx) team for the Light Duty Pickup Truck Seat Cost Reduction program at General Motors (GM). GM had decided to launch the new full-size truck program in 2019 at assembly plants in Fort Wayne, Indiana, and Silao, Mexico. To increase profits, GM sought to decrease costs in the manufacturing process. At the time, GM enjoyed a long-term tier-1 supplier relationship with Skübi Automotive North America LLC (Skübi) for its truck seats. Skübi’s facility in Indiana could not fully support the seat assembly for the new truck program, but Skübi did have capacity at its plant in Ohio, and so it approached GM about moving all or some of the new truck seat production. However, GM had investigated some additional cost-saving opportunities. GM could contract directly with tier-2 suppliers (directed buy) for some parts and negotiate volume pricing, though these arrangements could harm relations with long-time supplier Skübi. Alternatively, GM could assume the risk of raw material cost fluctuations by entering material indexing contracts with its directed-buy suppliers. Bell needed to analyze these alternatives and their related risks, and choose the most cost-effective option for GM.
In mid-2017, a supply constraint analyst at General Motors (GM) was working on two electric vehicles: the Chevrolet Bolt EV for the US market and a similar Buick model to be marketed in China. GM had chosen to work with only one supplier for the vehicles’ lithium-ion battery: Morningside Power Storage of South Korea. However, since making that decision, consolidation in the freight shipping industry had led to higher shipping costs, and China had introduced regulations to restrict and discourage the importation of batteries. The supply constraint analyst needed to decide where the battery cell manufacturing and battery pack assembly should be located and the production levels necessary to meet, at the lowest cost possible, the needs of both the Chevrolet Bolt EV in the United States and the Buick version in China.
In February 2017, a purchasing manager for General Motors Company (GM) needed to come up with a sourcing proposal to source e-boost modules, which were required to support the enhanced 2020 Chevrolet Bolt Electric Vehicle and the new 2020 Chevrolet Bolt Autonomous Vehicle. GM had four possible international suppliers to choose from. Each supplier had its pros and cons in terms of price, product development capability, and the architectural nature of the braking system. GM wanted to be a disrupter to the autonomous vehicle industry. Its top priorities were public safety and defect-free quality. In order to continue to maintain the market leadership position, GM wanted to retain the intellectual property of the e-boost modules. Which supplier would best meet the needs of the company?