Understanding Operations, Logistics, and Supply Chain at Volkswagen

Running head: SUPPLY CHAIN, LOGISTICS, AND OPERATIONS
VOLKSWAGEN
Understanding
Operations,
Logistics, and Supply
Chain
7/31/2019

SUPPLY CHAIN, LOGISTICS, AND OPERATIONS
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Table of Contents
Introduction................................................................................................................................2
Overview of Volkswagen.......................................................................................................2
Managing Quality...................................................................................................................3
Quality Assurance Theory by Volkswagen........................................................................3
Managing Business Relationship in Supply Chain................................................................5
Procurement Strategy.........................................................................................................5
Volkswagen FAST – Supplier Network............................................................................7
Supply Digitalization.........................................................................................................8
Structure of Procurement market.......................................................................................8
Triple Bottom line..................................................................................................................8
Think Blue..........................................................................................................................9
The social factor.................................................................................................................9
Recommendations......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

SUPPLY CHAIN, LOGISTICS, AND OPERATIONS
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Introduction
Supply chain management is comprised of establishing collaboration between companies to
link them with the customers, suppliers, etc. to boost the production value for the end-users
(Li, 2011). Logistics is one of the parts of supply chain procedure that is involved in
planning, executing and controlling the effective reverse and forward flow and goods and
service storage, and other related information at the point of origin consumption to meet the
requirements of the customer (Ailawadi and Singh, 2011). Furthermore, operations
management is the designing, implementing, and controlling of the operations that transform
raw material or resources in the desired form of service or goods and implementing the
business strategy of the company (Mahadevan, 2015). The intent of this paper is to present
the clear understanding of the logistics, supply chain, and operation management concept in
consideration to the Volkswagen Company which is one of the well-known automotive
companies operating in the United Kingdom. The paper is comprised of a detailed analysis of
two key areas that are managing quality and managing business relationships in the supply
chain. In addition to this, the paper is highlighting the used theories by the company under the
selected areas and issues it faces under the same head.
Overview of Volkswagen
Volkswagen is also known as VW is the automaker of Germany which is established by the
German Labor Front, a Nazi labor union in the year 1937. Headquarter of the company is
established in Wolfburg. It is the flagship brand of the Volkswagen Group which is the
world’s largest automaker in terms of sales in as per the reports of 2016 and 2017. Most of
the revenue of the company is generated from China which is considered to be its biggest
market. The Chinese market helps the company in generating its 40% of the sales as well as

SUPPLY CHAIN, LOGISTICS, AND OPERATIONS
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profits (Volkswagen, 2019). The meaning of Volkswagen in Germany is “people’s car”. The
present global slogan of advertisement of the company is “Volkswagen”, which is
highlighting the meaning of its name. The expansion in the production of the company took
place in the 1950s. At that time, the company established its Transporter van in the year 1950
and also Karmann Ghai vehicle in the year 1955. The abroad sales of the company were
strong many of the nations of export, however, due to the small size of the cars, uncommon
rounded look, and historical link with Nazi Germany, the sales of the company in the US and
UK were initially slow (History, 2009).
Managing Quality
The quality of the services and products offered by the company perform a major part in
maintaining high customer satisfaction. Customers specifically get satisfied and stay loyal to
the brand when the product or service provided by the business meet their expectations or
exceeds. Here, the objective of Volkswagen is to excite and surprise the consumers in all
aspects and winning their trust with the company's product's quality (Volkswagen, 2018).
Volkswagen embodies high quality and confirms reliable mobility for its consumers available
across the world. This is considered as the strategic goal of the company that guides the
complete operations of the quality management of the Group. The Quality Management of
the Group performs a key role at every stage of product development and product testing.
With this, the company make an essential contribution to the successful start-up of the
product, increases the satisfaction of the customer and low warranty and goodwill costs. The
company is also investing in electrification under its "Strategy 2025", under which it is
planning to launch 30 new electric cars (Allan, 2016).