Neil Marsons is Global Purchasing Director, Chassis, Supply Chain Design and Global Sourcing Strategy at Tata-owned Jaguar Land Rover (JLR) where he is accountable for strategy development and execution, as well as supplier performance for all chassis systems and commodities across all JLR vehicles. In addition he is accountable for all Supply Chain Design activity for JLR ensuring all inbound value chains to the automaker are designed and optimised. He is also globally responsible for the strategic sourcing direction of Jaguar Land Rover.
Simon Warburton talked to him at JLR’s mushrooming Gaydon site in central England where numerous cranes at work illustrate the rapid pace of expansion at this British manufacturing success story.
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just-auto: Can you outline what your day-to-day role entails at Jaguar Land Rover and how your department is structured?
NM: My day-to-day role is responsible for the purchase of all current and future chassis components and systems for all Jaguar and Land Rover vehicles globally. I am also responsible for global supply chain design and global sourcing strategy on behalf of Jaguar Land Rover.
The Global Purchasing function is circa 2,000 people strong and is split into Production Purchasing, Non Production Purchasing, Global Supplier Technical Assistance (STA) & Programmes, Cost Engineering and Purchasing Transformation & Operations. My Board of Management Director Ian Harnett also holds responsibility for HR & Property & Trading Division in addition to Purchasing.
We have recently been through one of the biggest reorganisations in the function’s history within the business across Production, Aftermarket and Non Production Purchasing areas where we have consciously reformed the operating model, organisation structure and role profiles to break down the work that we do into three key areas: strategy, delivery and transactional, which is Centre Led, Category/ Commodity based and aligned to the product engineering function.
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By GlobalDataThis was the result of 2-3 years work and I’m proud of what we have achieved. We now have created dedicated roles which allow more time for thinking, specifically strategy development and execution up to the point of sourcing AND delivery roles to focus more on contract cost management. I’m really excited with the developments we are making in both strategy and delivery which will make a real difference to the future of our business in coming years as Purchasing plays a lead role in driving supplier performance improvement in pursuit of excellence.
just-auto: What are the key challenges inherent with your role and as Jaguar Land Rover is expanding so rapidly, are those challenges becoming more complex?
NM: The challenges inherent within my role are multi-faceted; we have just undergone a huge transformation within Production Purchasing in which I have played a leading role, meaning a lot of my time has been spent on ensuring the ‘Target Operating Model’ is underpinned with well-defined organisation capability requirements and the organisation design, structures and roles that will enable the envisioned benefits to be realised and, most importantly, understanding the challenges faced by our buyers on a daily basis.
As we have grown it has put pressure on our systems and our processes so a few years ago, as a leadership team, we outlined a transformation programme to address these issues and ensure we are “match fit” for the future and the challenges faced by the business. These challenges are increasingly complex whether it is currency, capacity, raw material, supply, or related to autonomous, connected or electrification of our vehicles, the challenges are many but the opportunity to make a real difference to the future of our business is there every day for everyone within Purchasing at Jaguar Land Rover. But this is a journey and the challenges are increasingly complex and varied.
I keep using the phrase “change is the new normal” in almost every meeting I go into. I think it summarises very well the position our company is in and the state of our industry overall. We all need to embrace change and be agile; only by being agile and working as one team will we continue to have long-term sustainable success – after all the best way to predict the future is to create it.
It’s really a team game within Purchasing and within the company overall and my role as a leader within the organisation is to make sure that we have the right strategy, plans, actions and governance in place to deliver our contribution to the overall business plan – which is ultimately creating great vehicles and experiences our customers love for life. At the moment we’re in the process of rolling out what we call our “Customer First Principles” as a framework and way of how we conduct our business across the whole of the organisation. These principles of being personalised, transparent, being easy to do business with and making me feel special are a further illustration of our company’s commitment to our customers – across all areas of our business.
just-auto: As a company owned by TATA, but with very much a British heritage, how do you assess the current state of the UK supply chain?
NM: We review the state of our total supply chain on a daily, weekly and monthly basis, from a cost, quality, delivery and risk perspective. We have a multitude of measures and reports and we take proactive and positive action as and when required.
The UK automotive industry is nearly 2m vehicles a year and JLR is the largest manufacturer; the supply chain is re-building too. For example, JLR is the anchor customer to attract investment in world class aluminium casting and alloy wheel manufacturing. Further investment in skills and infrastructure is required to achieve benchmark levels.
And we have made significant progress in building our international manufacturing presence to become a truly global business. Our joint venture plant in China is fully operational and our manufacturing facility in Brazil is now open. We have confirmed plans for a new GBP1bn plant in Slovakia and agreed a contract manufacturing partnership in Austria.
At heart we are a British company: our commitment to UK production remains firm and we are at the core of the renaissance of British manufacturing. We are unique in offering customers a blend of British engineering, creativity and design innovation.
just-auto: How do you envisage the current Brexit negotiations? What do you need from them and would you favour a so-called transition period?
NM: A Brexit with tariffs, no customs agreements, taxes and harsher terms on attracting talent will be bad for business – no deal is not an option we can afford. We need zero-tariffs and free trade with the EU.
“Tariffs on our imported parts and exported cars could mean huge bills for Jaguar Land Rover – risking our UK business, jobs and investment.”
Tariffs on our imported parts and exported cars could mean huge bills for Jaguar Land Rover – risking our UK business, jobs and investment.
To continue growing we need access to the best talent in Europe. We are proud of our world class, diverse workforce and we want to keep it that way.
The British government needs to understand how important the hugely successful car industry is to the prosperity of the UK and its people – and Jaguar Land Rover is at the epicentre of that success.
We need confidence and certainty to make future investment decisions.
just-auto: What are your strategies to deal with commodities when you face a suppliers’ market – for example, when there are few suppliers and/or limited capacity?
NM: Every commodity on all of our vehicles has a technical and commercial strategy which is developed by Purchasing and Product Engineering. These strategies are a fundamental to how we do business and take into consideration customer requirements, technology developments and requirements and supply base market dynamics and the best sourcing approach and negotiation design. We are quite innovative in our approach to sourcing and use various tools like Game Theory as and when required to achieve the best outcome for the business.
We are on and have been on a massive learning curve, both from an engineering and commercial perspective.
just-auto: How would you characterise your main logistics challenges? I saw you recently at GEFCO’s new warehouse in Liverpool – that’s just one cog in the supply wheel but is it a template for other regions?
NM: Our logistics challenges are multi-faceted, our supply chains are becoming more global and complex, our customers are becoming more demanding, we are sourcing more components on an architecture/cross-carline basis and trying to drive commonality.
The solutions to the challenges we face vary on a case by case basis, but we work very closely cross functionally across Purchasing, MP&L and Manufacturing AND where applicable with our suppliers to deliver the right solutions. The GEFCO warehouse in Liverpool is just one example. They know Jaguar Land Rover and have built strong relationships with our team in Halewood as well as in Purchasing and Material Planning & Logistics.
We do have standard supply templates but the world in which we operate is changing so we have invested internally in a Supply Chain Design function to ensure that we deterministically engineer the optimal supply chains into our production facilities in the future. This has been working now very well for a number of years and delivering real results for our business.
The criteria and our approach vary based on a number of different factors which are different by commodity (e.g complexity and volumes etc) and receiving Jaguar Land Rover plant.
Cost is a critical element to our future success and competitiveness.
The Global Supply Chain Design team sit in production purchasing under myself, they work with supplier technical assistance (STA) and Material Planning & Logistics (MP&L), as well as very closely with manufacturing.
Three of these four teams get together every Friday – there must be 50 or 60 people. It is not a cosy get-together, it is for the key issues and deciding what are we going to do about them; I am involved with it. The key thing is, they are at the coalface preventing problems. We are driving towards it from a leadership perspective [across the company]. The more we play as a team, the better our chance of winning.
JA: How do you address cost reduction? I saw you recently addressed game theory at a conference – have you put any aspects of it into JLR purchasing and has it been effective? How do you persuade others of its efficiency if so?
We address cost reduction in the same way as other OEMs. We are working really hard to reduce our material cost base – it is critical to the long term sustainability of Jaguar Land Rover.
I did recently present at a CIPS event on the application of Game Theory within Jaguar Land Rover – it is and has been extremely effective within our business and has enabled us to achieve some amazing results. It wasn’t easy to begin with but we began by proving it out with some initial pilots a number of years ago and it delivered.
Game Theory is a process of thinking to the end. We started applying game theory starting in 2008 and it has been extremely effective in our business. We use it as one of the tools for negotiating with suppliers. It was not easy to begin with [but] it delivers. To be successful it requires leadership of the board right up to the CEO. It’s fascinating, it’s about the laws of competition, a lot of our competitors use it. Where we could not compete on scale, we went with it, committed to it [and it] continues to deliver some amazing results. It is a very useful tool in the purchasing tool kit, not only as a sophisticated business awarding approach but in the planning stage to ensure all JLR stakeholders are engaged in the evaluation process and the awarding process which is led by Purchasing throughout.
“We value the long lived relationships built up through good times and the remember those who stuck by us in the most difficult times.”
I was its biggest enemy [before] and I approached it with an open mind and supported some of the sourcing events in chassis and I was immediately won over. Our suppliers value the transparency and committed nature of the process, but it can be brutal. At the end of the day though, suppliers decide whether to participate and how far they are prepared to go in improving their business case. We have been using it for eight years plus and it is used by other OEMs but JLR has used it most extensively. But it is not the only approach we use to make sourcing decisions. Every awarding decision is assessed case by case and each situation demands a tailored, thoughtful approach. We take very seriously the magnitude of many of the decisions, not only to JLR but also the investment and commitment of our existing and prospective suppliers. We value the long lived relationships built up through good times and the remember those who stuck by us in the most difficult times.
JA: How do you work with suppliers to foster best practice – how would you characterise supplier-OEM relationships?
NM: We try to work intimately with our suppliers to foster best practice. For example, a month ago, myself, Trevor Leeks (Operators Director at our EMC) and John West (our HR Director for Manufacturing) opened and presented at our Supplier Skills Forum. At this event we shared real examples of what we are doing to remain competitive, attract, retain and develop key skills and talent and address issues we have with our external supply chain. As part of this event we facilitated supplier best practice sharing at our Castle Bromwich plant for a full day amongst our suppliers and we learnt a few things ourselves too!
We are a centre-led commodity based (and engineering system aligned) purchasing organisation. We are in a good place today. The global economy could shift at any point. I would like to think our supply business is in a good position, but that could change and we can’t become complacent. This company is moving at such a pace.
Purchasing within Jaguar Land Rover is very trusted by the CEO and the board. It has consistently delivered on its commitments and value – it also creates value. We have a trading division and that is adding value. That will become more prevalent.
JA: To what extent are you satisfied/dissatisfied with the recruitment of younger people into engineering for supply and purchasing needs. How can this be improved and to what extent does JLR support apprenticeships?
NM: In 2017 we recruited over 500 graduates and apprentices to our business, including a record number of female apprentice engineers. These people are the future leaders of our business and of our industry.
In Purchasing and STA we operate graduate and undergraduate schemes. Our apprenticeship programme has been developing young people from 16 years old for the last 3 years, these are proving to be a real talent pipeline and crucial to talent development within our function and business. I am working at the moment to try and deliver a specific commercial apprenticeship. I am the people champion for Early Careers within Global Purchasing and I see it as my responsibility for our business and our future to ensure that we attract, recruit, develop, retain and nurture the key talent of the future. It’s key to the success of this business and its long term sustainable success.
It’s not just about talent. Talent alone will not guarantee success. Working at Jaguar Land Rover is hard work, it’s not easy, but it is thoroughly fulfilling and enjoyable. I like to think that I work with some of the most talented people in the global automotive industry. I also work with a lot of people who work extremely hard; hard work is key. I also work with a lot of people who are genuinely obsessed and passionate about our brands, our vehicles and our business. It’s the magic cocktail of talent, hard work and passion/obsession that will continue to drive our business forward.
