Developing a Sourcing Framework for Jaguar Land Rover's Future Microchips

The role technology plays in modern day life has been on the rise for years. However, with the release of smart phones, PC tablets and other cutting edge technologies customers nowadays have much higher expectations in terms of the features they expect to find in their brand new vehicles. Moreover, shorter product life cycles and rapidly changing consumer preferences have forced companies to change the way they do business. More efforts have been put in place to emphasize the need for cost control measures. In addition, purchase planning has been deployed to enhance profitability and achieve a higher market share. As a result, the purchasing function in an organisation has taken a more strategic focus as opposed to its original operational focus. The transition from tactical buying to strategic buying was a mean of ensuring that the company’s purchasing function was aligned with the long-term goals and visions. Hence, the importance of strategic sourcing is not to be underestimated if an organization wishes to thrive in these tough times. The definition of strategic sourcing extends to include the process of selecting the best supplier that can provide Jaguar Land Rover (JLR) with the most competitive costs, quality levels, technologies and service level. Jaguar Land Rover is a premium car manufacturer in the United Kingdom. Its legacy is built around two great British car brands that are known for their design, engineering and manufacturing activities. The two car brands are rich in history and have been designing impressive machinery for years. JLR vehicles are known to offer customers a unique blend of style, performance, refinement, prestige and affordability. After the global recession in 2008 the company has been showing signs of recovery and is committed to achieving sustainable growth. Therefore, JLR has integrated strategic sourcing into its purchasing functions to enhance the purchasing department’s efficiency. The aim of this research project is to create a sourcing strategy for microchips, a vital commodity in any of JLR’s vehicles especially within the infotainment system. The report identifies the increased importance of microchips in the industry as well as the possible relationships Jaguar Land Rover can have with their supplier. It goes on to highlight the importance of product development’s involvement in purchasing and creating a strategic sourcing process for JLR. The report reflects upon the recent display sourcing event which the author was able to attend and uses that information as a base to develop the sourcing strategy for the chipsets. The report also critically praises the current sourcing procedure in place and points out areas of possible improvements