The iconic British automotive brand is best known for its Formula 1 racing team, but times are changing as people encounter the desired high-performance sports cars under the McLaren Automotive banner.
Even if you aren’t a motor racing fan, the chances are you’ve heard of McLaren. As one of the world’s most successful Formula 1 teams, it has a proud history going back to the 1960s and its current driving duo of Jenson Button and Fernando Alonso are firmly established as celebrity A-listers.
Less well known is the company’s high-performance sports car business. Although McLaren has been developing and manufacturing road cars for over 20 years, it is only after the successful launches of the likes of the P1 that it is getting a bigger share of the limelight.
With the transition from development to production, the McLaren Automotive division of the company has grown rapidly. One of the new joiners in 2011 was Dom Tribe, who cut his teeth at Ford and now leads SRM and supplier development activity from within the purchasing team headed up by Dan Scaglione.
We talk to Dom about how the company is working with key suppliers to bring cutting-edge innovation into its products, and ensure it is seen as a collaborative and attractive customer.
The SRM challenge
Since arriving, Dom has done many of the things you would typically associate with a new SRM programme, such as segmenting suppliers and creating performance scorecards. Ensuring limited resources are focused where they are most needed and the production suppliers deliver a regular flow of top-quality parts are key elements of Dom’s role. But the job is also about ensuring McLaren Automotive continues to capture cutting-edge innovation from suppliers that gives it a competitive advantage over rivals such as Ferrari – what he describes as 'technological horsepower' that 'pushes the boundaries of what is possible'.
These challenges are tougher than they might at first appear. Compared with mainstream car makers, McLaren Automotive’s volumes are tiny, which means some of the bigger automotive suppliers won’t touch it. The company also wants every component to be bespoke, and its quality standards and expectations are stringent almost to the point of obsession.
On top of all that, those suppliers that do do business with the company are not allowed to benefit from its most valuable asset – its brand – by promoting the fact they supply McLaren (on the basis that sponsors of the F1 team pay millions of pounds a year for affiliation and marketing rights).
Dom and his colleagues therefore need to think and work creatively if they are to meet their objectives and position McLaren Automotive as a customer of choice for its strategic and preferred suppliers. Here are some of the key activities they are pursuing as part of their SRM approach:
Site visits and road shows
Many companies would be proud to show off the high-tech, Sir Norman Foster-designed headquarters that McLaren’s employees are fortunate enough to inhabit. But how many would invite large groups of shop floor production workers from their suppliers to come and experience it? Well, that’s exactly what Dom has done with multiple suppliers so far, giving them the chance to see how the car is made, what the finished product looks like and – crucially – how their components are used within it, as well as to take in the impressive display of Formula 1 cars, trophies and other motor racing heritage in the expansive lobby.
The purpose of these visits, Dom explains, is to help supplier personnel understand McLaren’s engineering and quality requirements, to get them to buy in to its philosophy, and to motivate them to produce their best work every day. And for suppliers that aren’t able to come to McLaren Automotive, whether because of location or production constraints, McLaren Automotive is preparing to go to them.
When it comes to corporate entertainment, plenty of companies invite their suppliers’ top executives to sporting and cultural events. But, as with its site visits, McLaren Automotive extends its hospitality to more junior staff as well giving attendees the chance to actually drive an MP4-12C or try out their F1 simulators, which few people get the chance to try out.
Future plans presentations
To build trust and long-term collaborative relationships, McLaren has started to share details about its future strategy, plans, projects, technologies and other sensitive information with a small number of its most strategic suppliers – and asks them to do the same. “Persuading suppliers to confide in us is the essential first step in relationship building,” says Dom.
As well as enabling them to understand McLaren Automotive’s future requirements and spot business opportunities, this information sharing process is designed to give suppliers the confidence to invest in the sort of new research and equipment that will be key to the company’s future success.
Lessons learned process
Unlike many companies, McLaren Automotive plans to ask even its tactical suppliers for feedback on how it could make their jobs easier and more productive. Alongside that, it has started what it calls a 'lessons learned' process, whereby it brings together representatives from quality, engineering, purchasing, logistics and finance to discuss the relationship with a particular supplier. The output of this is shared with the supplier, which is asked to undertake a similar process looking at McLaren Automotive as a customer. Interviews are held to understand the key areas for improvement, whether they involve communications, process or management issues, and then joint action plans are developed.
For McLaren Automotive, innovation is all about optimising the performance, handling and driving experience of its cars. For future models, several of which are already in development, McLaren Automotive needs to continue to build on these innovations and acquire new technologies – some of which may still be on suppliers’ drawing boards, or have yet to be applied in an automotive environment.
McLaren Automotive’s R&D personnel already visit suppliers periodically to learn about their latest ideas and innovations. But the intention now is to take this a step further: first, by putting together a more cross-functional team so that engineering, quality, commercial and operational perspectives are brought together; and second, by aiming to give each supplier an on-the-spot decision about which ideas the company wishes to pursue.
By giving suppliers clarity and 'a target to shoot at', Dom believes it will encourage them to share ideas and instil confidence that viable solutions will be taken forward and implemented. Meanwhile, within McLaren Automotive it will help to promote information sharing and communication between the different business functions and ensure decisions are made jointly.
Supplier development programme
For critical suppliers that need to improve the quality and efficiency of their production, McLaren Automotive, like other automotive companies, has a programme designed to set targets and help suppliers achieve them using techniques such as lean and Six Sigma and includes regular meetings, performance monitoring and audits. Dom emphasises that this needs be 'a fair and transparent process' – for example, by ensuring performance data is put into context and explained before being circulated to senior executives, so they understand the work that is being done on both sides.
McLaren Automotive’s SRM programme is still being refined year on year, but with mechanisms such as these, strong executive support and a quest for excellence built on long-term collaboration, there’s no reason why it shouldn’t accelerate quickly – just like its head-turning sports cars.
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