General Motors: Supplier Selection for Innovation
(6 pages of text)
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?
This case is suitable for courses in operations management or supply chain management, particularly in a section dealing with supplier selection and innovation. After working through the case and assignment questions, students will be able to do the following:
- Examine the difference between traditional production outsourcing (i.e., North American manufacturer performs the product design; Asian supplier produces the component) and innovation outsourcing (i.e., the supplier designs and manufactures the component).
- Highlight what a purchaser should consider when making an innovation sourcing decision.
- Examine cultural differences, and determine how they will affect the outsourcing decisions.
- Illustrate how the buyer–supplier relationship affects a manufacturer’s long-term strategic goal.
United States, Large, 2017
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