Through electric vehicles, General Motors looks to define the automotive supply chain future of the Middle East...
In the ever-evolving conversation centred around the autonomous and electric vehicles of the future, one could be easily forgiven for failing to recognise the impact this will have on the manufacturers and the procurement networks of the automotive and transportation sector. As the eyes of the world focus on when we will see EVs and autonomous vehicles, the question should really be how.
For General Motors, one of the world’s leading automotive manufacturers, this conversation is more prescient now than ever before.
“Across our entire global footprint GM is evolving to deliver in line with our technological capabilities across the mobility industry and that means that we have to work closer with our suppliers across our global network in order to deliver and support this direction.” says Sulaiman Pallak, Head of Global Purchasing and Supply Chain.
For the last three years Pallak has been responsible for delivering this new strategy across the Middle East, with the vision of establishing GM as the leading automotive brand in the EV space.
Over the course of his career, Pallak has worked all around the world in both engineering and procurement and supply chain roles across multiple industries.
It is this experience, working with suppliers from all over the world in different disciplines and different capacities, that Pallak feels provides him with a keen understanding on how supplier relationships can and will prove key to defining the future of GM.
“GM is changing its strategy to move into the electric vehicle and autonomous technology space and that means that we have to work closer with our suppliers across our global network in order to deliver and support this direction”
“With the global footprint that we have at GM, there are suppliers and there are areas in procurement and purchasing that are more complex and in different markets that requires a certain level of understanding,” he says.
“My experience provided me with an understanding of how to look at those varying elements and then prioritise the company’s thinking as to how we can make informed decisions that involve sourcing the right materials at the right price and on time.”
As the company continues its evolution from a traditional automotive manufacturer, part of this journey will see GM redefine a number of supplier and partner relationships and Pallak firmly believes that procurement as a function has evolved into much more of an influencer in company strategies all over the world.
With manufacturing facilities worldwide, GM has a responsibility to, as Pallak explains, operate the supplier networks surrounding these facilities like a “well-oiled machine”.
This is no more apparent than in the Middle East, an emerging market in the procurement industry.
“It is true that the Middle East is still growing in maturity when it comes to purchasing and procurement,” says Pallak. “But that makes it a very good market because companies are investing in people, technology and processes in order to grow the market.”
“As the economy of the region grows it compels different areas of industry and different professions to grow alongside it.”
Being one of the biggest manufacturers in the world carries with it a level of responsibility that will prove key in pushing the Middle East procurement space towards becoming what CIPS has described as a potential procurement hub of the world.
This is part of GM’s strategy as the attention turns towards the supply of parts and materials being predominantly sourced from suppliers and manufacturing partners from other parts of the world and then shipped to the region. But how can GM seek out more efficient and more effective ways of getting products to market?
Investing in the region and developing a network of suppliers that are local, removing the dependency on sourcing from all around the world, is one answer.
“As we push to become the number one automaker in the region we need to push the ability to supply and our supply chain needs to become more forward thinking and more proactive,” Pallak says.
“How do we get our products into the region? How do we sell them to our supplier network? How do we reach our consumers? These are the questions we need to ask and in order to become the number one in the region, we need to engage with key partners.”
The company aspires to manufacture and sell best in class products and automotive vehicles. Pallak notes that this is an aspiration that is defined by its supplier capabilities and to this end the company implements a global strategy called the Strategic Supplier Engagement Program.
Through this initiative, GM creates a transparent supply chain network by sharing current designs and blueprints for products often years in advance.
This, Pallak feels, allows a far more collaborative supplier relationship that creates tangible benefits for both the supplier and for GM.
“We show the suppliers our designs and our blueprints, as well as sharing the volume that we’d need for these future designs,” he says. “In return, we get information about raw materials and technology that they can develop years in advance. Information that we can use and adopt to our plans.”
Pallak is currently working to take this supplier engagement further in the Middle East by planning to establish a Strategic Supply Council. This council will work with GM to identify ways in which the suppliers can generate cost efficiencies and find greater efficiency in getting products to market.
This is supported by an internal Supply Excellence Award, in which GM highlights the best of the best suppliers in regards to their collaboration. These awards will help define the Strategic Supply Council.
“In the future GM will plan to form the Supply Council for the Middle East from a wide range of strategic suppliers that we develop as we expand,” Pallak says. “This council will be the acting voice for GM as we seek out and define our future supplier portfolio.”
GM’s journey is one of continuous evolution. No journey can ever truly end and Pallak recognises that while this is a journey of transformation for the company internally, there is one key component that cannot be forgotten – the customer.
“As a company, we learn to ensure that the customer is at the centre of everything we do,” he says. “Every product, innovative technology or efficiency that we enable is done so through customer focused priorities.
“Is the customer getting the right product, at the right time, at the right quality? Is the customer getting the right care of service once the vehicle is sold? Do we have suppliers to provide the right care? These are the questions we must continue to ask ourselves as we continue to grow.”
Technology has redefined the automotive industry and this has forced GM to redefine its entire operations. Pallak believes that the next five years will prove crucial, as we can expect to see more developments in technology than we have over the last 50 years.
As it looks to embrace this future, GM will continue to work closely with partners and suppliers to develop solutions and technologies in order to be ready for this changing landscape.
That is what will continue to prove key for Pallak- collaboration.
“It’s about positioning ourselves to be ready for when this market matures. We can only do this through the relationships we forge with suppliers. We develop long term strategic relationships in order to ensure that these suppliers can process the products so that we can deliver them to market and of course, ultimately, the customer.”