Operations Payoff

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Audi Has The Right Idea – Innovative Strategy

Audi knows that supply chain strategy can separate the best from the rest. Global sales are up 11.7% with an operating return of over 10%. In a recent article in the Wall Street Journal, the writer explains that part of Audi’s success is based on the idea of using modular design throughout the family: VW, Audi, Porsche and Bentley.

Modular design is a supply chain strategy that uses commonality among products that offers reduced costs and greater production efficiency. For example, there are three common wheel base lengths among the various SUV models in the family. At the same time, Audi engineers still bring in top of the line styling and finishing along with distinct engineering in the transmissions and engines.

Use of modularity is an example of innovative strategy in the supply chain. As you consider your supply chain architecture, don’t just focus on problem solving and cost reduction, but look for innovative approaches that will provide you with competitive advantage while producing world class profitability. Audi knows how to do this and is overtaking the other premium brands on the global stage.

© 2014 – Rick Pay – All Rights Reserved.

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