2024 Global SRM Research - Return on Relationships

2024 GLOBAL SRM RESEARCH REPORT

CASE STUDY: INEOS - YOU HAVE TO BE COMFORTABLE WITH UNCERTAINTY

We need to explain some of the innovative things we are interested in co-investing in with suppliers.” He says the company understands it needs to be able to offer exciting prospects and enable suppliers to get involved at the development stage. “We hope to be able to work with fewer overall suppliers in future and find ways of working together as partners where our success (or failure) is tied together - where the supplier has skin in the game. But that’s to come, for now, it’s about getting the supplier management working at the right level.

The company as a whole is now focused on growing its market share, as well as working on new powertrains to be able to offer petrol, diesel, battery-powered, hybrid and hydrogen-fuelled vehicles to customers (see box out) in future. “We have networks to sell vehicles in more than 40 different countries, so we’re growing - people-wise and profit- wise. We’re standing on our own two feet, which is quite impressive for such a young company.”

“With transparency and trust - it’s a proper two-way street.”

“We know we need to set a supplier strategy and be more proactive about managing risk, as well as make some make-or-buy sourcing decisions,” says Bjorn. Supplier management is currently “immature” he says and the approach to suppliers is inconsistent. It has not yet been formally established and many processes remain manual and labor-intensive. But Bjorn clearly communicates how he would like suppliers to be received: “I tell people to treat them just as they would wish to be treated themselves. We need to be a customer of choice and work harder than the more established brands to get suppliers on board.” He says the interface between the business and its suppliers exists in three different areas, and each area or pillar has its own approach. He plans to establish a fourth pillar which will effectively run a supplier management centre of excellence to support the rest of the business. “This function should help with all cross-functional integration. It is likely to include streamlined KPIs, reporting, systems, process implementation, continuous improvement activities, ESG, costings, IT, compliance, contract management and so on.

Having this will enable the three other functions to concentrate on operational performance.” Bjorn and his departments are concentrating on this continuous improvement, and implementing more processes to ensure suppliers view the company as a professional organisation. “We now have one leadership team, we’re improving processes, and have plans to get IT working across everything internally. “Ultimately we want to have one supplier interface and speak with one voice to suppliers, because from a supplier management perspective, it’s the right thing to do.” Supplier partnerships With such a large department and so many things to do, choosing what to tackle is essential. In March, Bjorn gathered 30 of his managers for a full day and together they selected six work streams to focus on this year from a long list of 19.

Supplier partnerships is one of those half dozen areas that will get some extra attention; as well as AI in supply management, training; and recruitment and retention. “I know what good looks like, I know exactly what I want to do, but I have so many priority areas that you can’t do everything at once.” He wants to be able to offer interesting partnerships and projects to the right suppliers. “If you have suppliers who don’t want to work with you it’s just impossible, but for those that care about INEOS – for various reasons, not necessarily just more money or volume – there could be the opportunity to work on innovation projects or offer them exclusive rights. “To date we’ve only really produced one vehicle, so we don’t quite know what suppliers think of us – we need to act as salespeople as much as buyers and convince them we’re a serious and interesting prospect.

Model plans: More powertrains and vehicles to come

INEOS Automotive followed the Grenadier with a pick-up truck called the Quartermaster which is just starting to reach customers around the world. It then plans to launch the Fusilier, a smaller 4X4 which gives customers the option to buy all- electric or electric with a range- extender - a small engine that can charge the battery when it is not possible to plug it in.

This is currently in the design and sourcing phase and is planned to come to market once the consumer demand for EVs increases, along with charging infrastructure. A fourth model is also planned. “It’s important we build supplier strategies that link these together as much as we can,” says Bjorn.

The company ultimately plans to offer vehicles with a range of powertrains - petrol, diesel, electric, hybrid (range extender), and hydrogen-fuelled to provide the market with an alternative. It unveiled a ‘Grenadier Hydrogen Fuel Cell Technology Demonstrator’ at the Goodwood Festival of Speed in July 2023 but said refuelling infrastructure needs to be in place before it is commercially viable.