supply chain challenges, future prospects and the exemplary case of the Ukrainian supplier Leoni

An interview with Silvano Michieli, Main Procurement Officer at Lamborghini

Sant’Agata Bolognese, 20 June 2022 Given that 2020, global offer chains have been faced with exceptional political, social and financial situation due to the pandemic, the semiconductor lack and the Russia-Ukraine war. Lamborghini’s resilience ensured that the enterprise remained exceptionally good as it not only took on these challenges but also reached file-breaking effects on the profits and monetary fronts. What system did Lamborghini adopt to guarantee that creation could carry on uninterrupted? What approach is it getting as it prepares for the long term? These have been the subjects reviewed with Silvano Michieli, the Main Procurement Officer at Automobili Lamborghini, alongside with the exemplary cooperation with the Ukrainian supplier Leoni.

How is Lamborghini reacting to the supply chain problems presented by the latest geopolitical problem?

“First Covid, then the challenge with semiconductors, not to point out the conflict in Ukraine and protectionist insurance policies: from this backdrop, Lamborghini has been taking possibility limitation steps and securing its source chain. Just one of the most important initiatives that we’ve taken here has been to forge even closer ties with some of our strategic suppliers, heading from a more common “Supplier – Client” connection to just one that’s additional of a partnership. At the identical time, we revise our processes to a additional proactive, analytical solution. This will empower us to anticipate any new difficulties in the sector. Now far more than at any time, we firmly feel that it’s critical to acquire a issue-solving strategy in an worldwide atmosphere that will present much more and extra worries and difficulties.”

Referring exclusively to the war in Ukraine, Lamborghini is in shut get in touch with with its suppliers in the place thanks to an unexpected emergency job pressure set up by the Volkswagen Group that is responsible for ensuring that a steady stream of materials continues to arrive. A single of the stories that has emerged issues the cooperation with Leoni, which creates wiring for the Huracán in the West of the nation.

Leoni’s staff members are obtaining to make large sacrifices to maintain their production procedures going and so maintain driving the output capability of their state. The time they expend doing the job is interspersed with curfew periods when they have to take shelter in the underground areas of the manufacturing plant. They show heroic amounts of bravery, devotion to their get the job done and appreciate for their region, and Lamborghini is enormously grateful to them.”

If Leoni’s manufacturing pursuits are introduced to a halt, how will you tackle it?

“Our approach is based on the notion of duplicating alternatively than reallocating, with a “dual production” approach. Thanks to our enable, our Ukraine-primarily based suppliers are working to make certain that some of their vegetation in Europe can depend on the exact production capabilities. It implies that our relationship with our established suppliers will keep on being unchanged. They’ll carry on their generation perform in the manufacturing unit in Ukraine while we aid the procedure of duplicating the plant exterior the theater of war. Despite the fact that we hope it doesn’t materialize, we’ll be all set if the war brings output in Ukraine to a halt yet again. It is a way of displaying our trust and gratitude to the workers on our offer chain in Ukraine, who attempt to keep production heading every single working day.”

All of this goes to show the extent to which Lamborghini considers and treats its suppliers as partners in its projects. The roles are sometimes even reversed: the corporation from Sant’Agata Bolognese typically acts as a “consultant” in the procurement of raw materials these as carbon and microchips. Nevertheless, in get to be picked as authorized suppliers in the very first area, corporations have to go by way of a somewhat demanding ranking method.

How are Lamborghini suppliers chosen? What are the necessary indicators and other needs?

“We area terrific worth on examining the financial trustworthiness and sustainability of our suppliers and their source chains. Even though the economic facet of issues must be regarded, at the very same time we’re owning to offer with considerable economic strain brought on by the series of worldwide crises that we’ve observed in modern yrs. As properly as the margins, we now also search quite intently into the solidity of our suppliers. The significantly partnership-like nature of the interactions that we are inclined to set up enables them to find out about our demands from the really beginning and optimize long run materials in conditions of moments and expenses. In addition to financial balance, we also pay out shut interest to progress effectiveness and improvements, top quality and logistics in conditions of shipping and delivery protection.”

A single of the keys to the achievements and higher standards of the Lamborghini procurement strategy is the well balanced blend concerning extremely nicely-arranged large suppliers with connections to the Volkswagen Group that can offer specific kinds of know-how or unique parts, and a variety of more compact but hugely specialized suppliers that can provide particular goods for the distinctive Lamborghini production systems.

Lamborghini is aspect of the Volkswagen Team. In conditions of synergy, what are the greatest added benefits that this provides to the source chain?

“There are sizeable rewards to being section of a group like Volkswagen and this is shown by predicaments such as the semiconductor shortage. Lamborghini has just one of the best contribution margins in the group, so it is prioritized when it comes to provides. In addition, the team gives us entry to a range of kinds of know-how that play a important function in our evolution. We’re speaking about technological innovation that would not ordinarily be in reach of a compact organization like ours. It provides us special access to modern remedies and a apparent aggressive edge above our rivals.”

From present troubles to long run prospective buyers: at existing, Lamborghini is reorganizing inventory administration along its supply chain for the reason that it realizes that in the upcoming the greatest threat of irregular supplies will be with the main elements and components, which enjoy the most decisive part in the entire creation cycle.

Globalization as we know it is set to improve. Several economists and historians are talking about a decline in globalization and the start off of a deglobalization development. What is your place of watch on the subject?

“I imagine that phenomena like globalization are irreversible. Various geographical regions contribute to the generation cycles of objects that are made today. In my view, an extraordinary sort of deglobalization is a Utopian, small-sighted plan. I’m extra of a believer in rethinking the latest provide processes and outlooks, which are in any situation undergoing a pure evolution in the industry due to the new situation.”