Supply and 3rd line are present on

Supply and 3rd line are present on

Supply chain of Renault When we look at the supply chain of Renault it does not differ much from other car manufacturers. The making of a car starts with the design of the chassis, which is done by the designing department of Renault. When the design is approved, a concept car must be produced to check the feasibility of the car. When the concept car has proven feasible the real process in the supply chain begins. Renaults owns plants where the certain car is produced. In order to manufacture the car Renault needs suppliers.This is the first part of the supply chain of Renault.

When we take a closer look at the suppliers in the supply chain we can divide this in raw materials, standardisers, component specialists and integrators. Raw material supplier supplies for example Steel banks, Aluminum ingots and Polymer pellets. This supplier can operate on a local, regional and global level.

Standardisers are suppliers that deliver for example tires or electronic systems for the car. Their market presence is on a global level.Component specialists supply stampings, injection moldings or other engineering components for the car. Their market presence is also on a global scale as far as the first line of producers, after that the 2nd and 3rd line are present on a regional and local level.

Integrators are suppliers who deliver interiors, doors and chasis. They operate on a global level (Kumar & Veloso, 2002). These are the most important suppliers on left hand of the supply chain. All these supplies are ordered and shipped to the plants of Renault. This is the second part in the supply chain of Renault.

The plants of Renault are located in different countries in Europe including the plant of Dacia, which is also owned and produced by Renault. The different locations of plants are spread over France, Romenia, Slovenia, Spain and Turkey (Eurofound, 2007). When we move further down the chain, after the cars are manufactured they have to be distributed to the importer. This is the central location where all cars of Renault will go before they are delivered to the next distributor/ customer, which are the local car dealers of Renault. The ealer sells the car and makes sure the car is delivery ready to the final part of the chain, which are the consumers throughout the country. Stakeholders In 2009 Renault has set up the “DRSE”, which is the department of Renault which is responsible for all the corporate social responsibility aspects of the company.

The department is responsible for acknowledging the responsibilities and commitments towards employees, customers and the planet, but also for the dialogue and engagement of stakeholders (Renault, 2011). We have identified the following stakeholders for RenaultInsitution & associations -States -EU -UN -Local authorities -Trade Unions Customers -Private -Corporate Social groups -Disabled -Gender -Nationalities -Minorities Employees -Former employees -Present employees -Trainees NGO’s -Consumer protection -Health -Environment -Education/culture -Human rights -Globalisation Capital markets -Banks -Lenders -Borrowers -Rating-agencies Suppliers Shareholders We think that the most important stakeholders among the Renault Group’s supply chain are as follows. In first place we have suppliers at the beginning of the supply chain.The suppliers of Renault must abide by the standards Renault set in “Declaration of fundamental social rights.

” This document addresses important issues such as child labour and health and safety for example. Renault has taken different measures to control for these issues such as external audits and assessment criteria for supplier sites for example. Furthermore Renault requires suppliers to follow the environmental legislation (Renault 2011). The supplier stake in the company is in-time payment, reasonable purchases.Their power is low because mostly it is a high fragmented industry. We see suppliers as a opportunity in perspective of economies of scale, however they can become a threat or challenge when child labour is used for example, or when switching costs or support costs are very high in case of non abidance to the “Declaration of fundamental social rights.

” Renault has an ethical obligation to make sure that their suppliers are child labour free and also that they make sure that there is no forced labour. Strategy: The current strategy of Renault is sufficient.As mentioned earlier they have their Declaration which is mainly based on the conditions set by the International Labour Organization (Renault, 2011). When manufacturing Renaults in different countries of the EU we come to the next stakeholders we have identified which are important to the company. Namely the different institutions and associations. It is useful to differentiate between both institutions and associations as mentioned above in the stakeholder overview and non-profit organizations, which are, concerned with for example the Global compact.Renault sets criteria in order to decide upon which non-profit organizations to support (Renault, 2011).

Furthermore we recognise the institutions as local authorities in for example countries where plants are established, or states where the cars of Renault are sold. Renault must abide to the power of these institutions and associations in terms of safety standards for their cars or safety for their employees, or EU rules and regulations, which influence the way they do business in Europe for example.They must consider also their social and environmental impact on which we will elaborate later on. There is an opportunity for Renault, which they already try to expand on. This is the opportunity of developing one of the safest and most responsible car in the industry, building a brand image around this and market it.

We recognise low threat in this stakeholder relation, because of Renault’s standards in both strategy chosen for responsible cars in cooperation with their “DRSE” department responsible for their commitments to CSR.Renault has the legal obligation to conform with rules and regulations as well as laws in terms of safety standards, disclosure of information and tax for example, Furthermore they have an economic obligation to assure continuity for the company and the employees, which automatically brings us to an ethical obligation of not replacing as much employees as possible in favour of automating processes. Strategy: Renault should have a defending position towards institutions and associations that have a lot of power over them such as governments and local authorities.However there are opportunities that must be seized in terms of lobbying with these parties. Although defending seems to be the right strategy analysis, Renault should really consider to emphasis collaborating to avoid damage to their image.

Next stakeholder is that of employees and shareholders. Employees are more emphasized in the social policy of Renault. They want to develop their employees, stimulate group performance and promote a social strategy that is all underpinned by their codes of good conduct. Remuneration and emphasize on innovation and progress are the headlines of Renault’s way to commit personnel.Furthermore, Renault strives for diversity and motivating working conditions. In the “Declaration of the Renault group employees’ fundamental rights” Renault lines out the specific actions taken per continent.

Renault has set up a shareholder’s club where activities are arranged for shareholders and they have a consultative committee, where shareholders are consulted for differing issues (Renault, 2011). The stake of employees lies within continuity, economic performance and a social and safe environment to work in.Although they have low individual power, we recognise a threat of high collective power, e. g. striking and employee performance that correlates directly with the performance of the company.

The shareholders’ stakes are related to financial performance, short term earnings, stock prices and the public relation of the company. Furthermore they have a high need for information. They have high power in the form of voting rights or the issuance of capital.

The challenge for Renault is to manage the information disclosure towards their shareholders.Renault has legal obligation in terms of safety standards, minimum wages and vacation days for example. Towards their shareholders they have an obligation to disclose the right information and in ethical perspective to prohibit window dressing. The ethical obligations towards employees lies with equal opportunities and for example inflation corrections in our vision. Strategy: In first place the strategy must be to involve employees in the processes.

A step further means that they should collaborate to avoid striking employees and collaboration can lead to more efficient processes and happy working employees.The next important stakeholder is the last one to be found in the supply chain. It is in our eyes also the most important stakeholder since they make or break the company.

We are talking about the consumer/customers and thus end-user of the product. Renault lays emphasize on the affordability of their cars in combination with leading-edge technology and implementing ecological innovation into their cars. They even say that they are the only manufacturer of cars who is able to deliver an electric car on large scale including in developing countries.

Other important issues addressed by Renault are “a long-term commitment to customer safety, constant focus on customer satisfaction, making a difference through diversity, responsible advertising (Renault, 2011). Customers’ stake in Renault is the right for reasonable and safe products. Furthermore car users are more and more interested in ecological vehicles that harm the environment and planet as little as possible.

The individual power of customers is quite low, however we recognise a very high collective power.Customers determine mostly if the company is on the right track in their operations. Sales is a indicator for Renault and other car manufacturers as well if they are doing the right thing and they have to listen to their customers in order to stay on track. Although Renault already has a lot of customer interaction in order to determine their strategy we still recognise a opportunity here to higher the level of interaction.

That is immediately also a threat; decreasing interaction with their customers will probably mean that sales will drop.Another important threat is that of increasing prices because of innovative technology to spare the environment. Renaults must make sure that they stay affordable because in the end we think that customers want to be social responsible until a certain extent of what they can and want to afford. Renault has a legal and ethical obligation to produce cars that are safe to use and that are sustainable. Although sustainability is still an ethical obligation towards customers and consumer, it will be a legal obligation in the long run. The economic obligation is towards the shareholders.Sustainable cars are taking over the market and in order to maximize the worth of shares, management has an obligation to seize opportunities.

Strategy: The best practice strategy towards customers lies within the collaboration with them. Interaction between Renaults and its customers will make it easier to meet specific demands and improve customer satisfaction. The last important stakeholder who cannot be found in the supply chain is their competitors.

We recognise in contradiction with Renault that this is also an important stakeholder.Although we understand that there is far less stakeholder engagement with competitors than with the other stakeholders mentioned, competitors do have a stake in Renault in terms of the division of the market and the market share. Competitors determine what Renault does now and in the future. The power of competitors is very high as we see it because of the competitive characteristic of the car industry. The challenge for Renault is to keep up with the development of new technologies and to make sure there is enough time to market the products. Renault has few obligations towards competitors.A legal and ethical obligation is not to spy on competitors.

Furthermore it is a legal obligation towards competitors, but also towards customers and government not to form cartels with other competitors to make pricing agreements for example. The strategy towards competitors should be monitoring. Eurofound, 2007. Renault manufacturing plants.

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com/en/Groupe/developpement-durable/responsabilite-sociale-de-l-entreprise/Pages/fournisseurs. aspx (Accessed on: 7-3-2011) Renault, 2011. DIALOG WITH INSTITUTIONS AND ASSOCIATIONS.Abstracted from: http://www. renault.

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