Case Study

Suntu motors: Planning for excellence (B)

4 pages
April 2018
Reference: IMD-7-1907

This two-part case series makes a deep-dive into the Sales and Operational Planning (S&OP) process of Chinese carmaker Suntu Motors. They could not have wished for a better market response when it launched its first car in the fast-growing midsize SUV market. It predicted selling 240,000 cars in the first year; but, three months after opening its order books, it had to raise its forecast by almost 40% to 330,000 cars. It was now up to the already overstretched supply chain, production and purchasing teams to increase supply at short notice. This was not an easy task considering that Suntu was dependent on the cooperation of 150 external suppliers, while its main production facility in Chongqing was already running at 95% of total capacity. In CASE B Suntu had increased production capacity for this new SUV, but this came at a cost. Short-term and costly supply solutions had to be implemented to overcome shortages at sub-suppliers; lead-times for lower-priority models increased; planned launches in low-priority markets and launches of new models had to be postponed. With its ambition to increase profitability and become a larger global player in the premium car market, Suntu now needed to turn its attention to its internal processes, and in particular the S&OP process as a platform for keeping the entire organization aligned on the key priorities.

Learning Objective
  • The components required to implement a mature planning process
  • The importance of using a step-by-step improvement approach when it involves a company’s mind-set change
Keywords
Operation, Supply Chain, Sales, Planning, Demand Forecast, Integrated Circuit, Scenario Planning, Supply, Production Planning
Settings
World/global, China
Automotive, Automobiles
2014 - 2017
Type
Field Research (Disguised)
Copyright
© 2018
Available Languages
English
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