The Case Study of Vw Ag
The case study of Volkswagen AG (VW AG)
Everything is in the world has their aims, missions and responsibilities. While a tree has to produce oxygen, the aeration of soil must be provided by earthworms. In this context, the primary mission and responsibility of companies is to sustain their life. However, whilst they do this, also they have to protect the balance of the nature and hence companies should ensure their improvement not only economically but also socially and environmentally. “VW AG is aiming to be Number 1, both economically and ecologically by 2018” (VW, 2010). For this purpose, the case study of Volkswagen is investigated on all these three characteristics. Moreover, to be more cautious, the Volkswagen AG Sustainability Report will be compared with European Automobile Industry Report and SMMT Automotive Sustainability Report in this study.
If a company is not strong enough economically, it cannot be expected that this company may be sustainable. Thus, companies should try the cheapest cost to be powerful economically. The most important way of achieving cheapest cost is to reduce purchase costs because the purchase costs in the auto industry exceed 60% of the sales and hence any savings are significant (Slaper and Hall, 2011). VW has been trying the cheapest cost on all action areas; production, inventory, location, transportation and information and they have a purchasing strategy which helps to improve them (Figure X). Table 1 shows some examples of sustainability practices at VW AG. Furthermore, it may be claim that many economic applications also help for social and environmental characteristics of supply chains. For example, when VW started to use trains for transportation, this reduced 35 kg CO2 emissions per car in addition to cheaper cost.
Figure X: The framework of VW’s Purchasing Strategy
Table X: The examples of sustainability implementation at VW. (Compiled from the VW Sustainability Report, 2010)
Senge claims (2010, p. na)
Everything is in the world has their aims, missions and responsibilities. While a tree has to produce oxygen, the aeration of soil must be provided by earthworms. In this context, the primary mission and responsibility of companies is to sustain their life. However, whilst they do this, also they have to protect the balance of the nature and hence companies should ensure their improvement not only economically but also socially and environmentally. “VW AG is aiming to be Number 1, both economically and ecologically by 2018” (VW, 2010). For this purpose, the case study of Volkswagen is investigated on all these three characteristics. Moreover, to be more cautious, the Volkswagen AG Sustainability Report will be compared with European Automobile Industry Report and SMMT Automotive Sustainability Report in this study.
If a company is not strong enough economically, it cannot be expected that this company may be sustainable. Thus, companies should try the cheapest cost to be powerful economically. The most important way of achieving cheapest cost is to reduce purchase costs because the purchase costs in the auto industry exceed 60% of the sales and hence any savings are significant (Slaper and Hall, 2011). VW has been trying the cheapest cost on all action areas; production, inventory, location, transportation and information and they have a purchasing strategy which helps to improve them (Figure X). Table 1 shows some examples of sustainability practices at VW AG. Furthermore, it may be claim that many economic applications also help for social and environmental characteristics of supply chains. For example, when VW started to use trains for transportation, this reduced 35 kg CO2 emissions per car in addition to cheaper cost.
Figure X: The framework of VW’s Purchasing Strategy
Table X: The examples of sustainability implementation at VW. (Compiled from the VW Sustainability Report, 2010)
Senge claims (2010, p. na)