Have you changed your outsourcing strategy for service parts operations?

As with other parts of the automotive supply chain, outsourcing strategies tend to vary by OEM, region and operation. Transport services, of course, remain outsourced, although some carmakers – such as Toyota on the west coast of the US or in Japan – do have their own fleets. For larger regional parts and distribution centres, mixed models are in place. A basic rule of thumb is that the larger the operation, the more likely a carmaker is to keep it in-house.

Goel thinks that carmakers are simply more able to remain customer focused and flexible if they run their own parts centres. Before he joined Volkswagen Group of America, four of the company’s then five warehouses were outsourced, which Goel promptly took in-house over the course of 2013 – before adding three additional in-house centres. He says the carmaker has since saved money and improved performance.