1. Bentley Motors: Outsourcing
The influence of the VW Group as a parent company
Philip Cox UID:
23/11/12

2. Bentley Motors
Vision
Bentley Motors the definitive British luxury car company, dedicated to developing and crafting the world’s most desirable high performance cars.
Bentley Continental GT released
Founded 1919 by W.O. Bentley
VW take over in 1998, first release of joint developed product in 2003/4 (Continental GT).
The surge in sales from the new market sector required a more modern manufacturing and supply chain approach, of which outsourcing was a major factor.

3. Axle Component Suppliers Bentley Production Line Crewe
Bentley Motors: Outsourcing Strategy
Inside out approach
Strategic outsourcing: sub-assemblies which offer least added-value to the customer [1]
Tactics: take advantage of VW’s economies of scale
VW Group vertically integrate (buy-out suppliers and set-up sub assembly plants)
Axle Component Suppliers
VW Braunschweig
(Axle Sub-Assembly)
Bentley Production Line Crewe

4. Bentley Motors: Core Competences
Luxury customer features and personalisation
Seen by VW Group as a centre of excellence for interior quality and craftsmanship
Specialising in bespoke, hand-crafted wood and leather interiors
Largest producer of 12-cylinder powertrains [2]
Variable displacement / Cylinder de-activation implementation

5. Familiarity with Material
Make vs. Buy Decision Matrix [2]
Depends on strategic significance
In-house
High Added
Value
Interior Trim
Infotainment
Process
Buy-in
Depends on investment
Low Added
Value
Axle Assembly
Body Structures
Least Used
Material
Most Used
Material
Continental GT
Familiarity with Material

6. Risks to Bentley Manufacturing Expertise Brand Reputation
Leading in manufacturing innovation offers greater competitive advantage as this is harder for competitors to copy than purely technical or product innovation [3]
Manufacturing Expertise
Brand Reputation
Manufacturing Flexibility
Socio-economic Implications
Attractiveness of Account
Loss of expertise from Bentley’s manufacturing site
De-valuing of the hand-crafted reputation of the brand in which the heritage of the company is built upon
Less opportunity for manufacturing flexibility [4]
Greater difficulty to implement an engineering design change compared to on-site manufacturing facilities
Government grants based on the numbers of apprentices / jobs created for local economy
Higher levels of offshore out-sourcing could result in the down scaling of operations in the UK
If a VW Group project is pulled Bentley’s volumes alone are not enough to support the sub-assemblers overheads
Bentley is seen very much as a nuisance customer to suppliers due to low volumes and the high levels of product variation [5]

7. Recommendations for the future….
Focusing on business core competences of interior quality and craftsmanship
Less likelihood of having Bentley developed platforms
Outsourcing of vehicle assembly with product range extended?
Brand values built around having Crewe as the home of Bentley’s manufacturing
Follow VW’s move towards a modular platform strategy, and higher levels of global sourcing of major components
VW are looking to implement a C3 Sourcing Strategy (Cost Competitive Countries) [6]

8. References
[1] Sharpe, D; 2012; ES4C9 Supply Chain Management- Lecture 6: Outsourcing. University of Warwick
[2] Finlay, S; Big Engine Builder Bentley Thinks Smaller. Wards Auto Available at: [Accessed: 20/11/12]
[3] Quinn, J and Hilmer, F; Strategic Outsourcing (Sloan Management Review, 1994)
[4] Lifestyle Lounge; Pros and Cons of Outsourcing. Available at: [Accessed: 20/11/12]
[5] Bowser, C; ES4C9 Supply Chain Management - Lecture 7: Supplier Selection. University of Warwick
[6] Day, J; Supplier Business analyzes VW production / purchasing plans. Automotive Electronic News. Available at: [Accessed: 20/11/12]
Resources
Wan, M; Bentley. Autozine. Available at: [Accessed: 18/11/12]
Investopedia; Definition of Core Competencies. Available at: [Accessed 20/11/12]
Scott, S. Bentley Motors - Chassis Engineering Axle Team Senior Engineer
Brightmore, B. Bentley Motors - Chassis Engineering Logistics Co-ordinator

9. Thank you for listening. Are there any questions?

10. BACK-UP Bentley Mulsanne
1/3 of the volume of the Continental model line
Far less out sourcing of major sub-assemblies
Bentley designed and developed platform and body structure
Axle assemblies and bodies are manufactured on-site at Crewe
6.75L V8 has been a long standing Bentley development
The Continental model line brought about a massive business growth. Pre year 2000 Bentley were only producing a few thousand vehicles, where as at their peak in 2007 they recorded 10,0000 sales.
Therefore Bentley had to re-assess their out-sourcing strategy. No longer could it take 6.5 days to manufacture a single vehicle, but they also had to protect their core values and also play towards their core competences as well.

11. BACK-UP Bentley Continental Access to VW’s D1-platform
Typical of automotive industry with outsourcing of major subassemblies
Body structure (VW Zwichau, Mosel)
Front and Rear axle assemblies (VW Braunschweig, Glauchau)
Powertrain (V8T+ models)
Vertical integration with VW owning many of their sub-assemblers
Improved collaboration and volume planning
Platform shared with VW Phaeton, with Bentley’s volumes originally making up excess capacity
Bentley Continental

12. Familiarity with Material
BACK-UP
Make vs. Buy Decision Matrix [2]
High Added
Value
Infotainment
Interior Trim
Infotainment
Interior Trim
Process
Low Added
Value
Axle Assembly
Axle Assembly
Least Used
Material
Most Used
Material
Continental GT
Mulsanne
Familiarity with Material

13. BACK-UP Attractiveness of Bentley’s Account [5] Attractiveness
Development
Core
Nurture client
Expand business
Seek new
opportunities
Cosset client
Defend rigorously
High service &
response
Attractiveness
of account
Nuisance
Exploitable
Drive premium price
Seek short-term advantage
Risk losing customer
Give low attention
Low interest
Lose without pain
Steele and Court
(1996 p. 69)
Relative value of
business or account