You Have to be Comfortable with Uncertainty — INEOS Case Study
INEOS Automotive’s CPO and Chief Supply Chain Officer Marcus Bjorn on establishing a start-up vehicle manufacturer and getting supplier management going
INEOS Group is a business powerhouse. Headed by CEO Sir Jim Ratcliffe, who founded it in 1998, it now comprises 36 companies at 194 sites in 29 countries, staffed by 28,000 employees.
What began as a chemicals business established by a chemical engineer is now a brand spanning construction, cosmetics, food and pharmaceuticals. British billionaire Sir Jim is also co-owner of Manchester United Football Club, and INEOS partners with numerous teams in Formula One, sailing, cycling and rugby.
INEOS Automotive is one of the latest additions to the INEOS stable. It has effectively been running as a start-up within the wider group. After years in development and more than a million miles of testing, the Grenadier, a 4x4 first dreamt up over a pint in a London pub, was launched in 2022.
Marcus Bjorn joined in September 2023 to lead its end-to-end supply chain. He now oversees a 200-person operation split into three teams: Procurement, Supplier Quality and Supply Chain.
He’s excited rather than daunted by the prospect of building something from scratch.
“I Like the Chaos”
Bjorn has over two decades of experience in the sector. He previously helped turn vision into reality at McLaren Automotive when it moved into luxury car production.
“I like the chaos,” he says. “I could have gone back to work for one of the big OEMs, but at a start-up you can really see the impact you’re making. You have to be comfortable with uncertainty. If you get stressed about the things you don’t know, it’s going to kill you. You have to trust yourself, prioritise the right things and establish a culture that means that if people aren’t sure, they ask for help.”
This kind of fresh yet challenging atmosphere, he says, brings the team closer.
“You have so many issues to overcome together, you become interlinked, like a family. When I started here, I said the key three things were ‘Transparency, Trust, and Fun’. If you live by these, don’t hide things and are transparent so people trust you, it can be quite fun. And you can implement that with suppliers too, with trust and transparency, it’s a proper two-way street.”
Building from the Bottom Up
INEOS Automotive initially planned to manufacture in Wales. It later acquired a former Mercedes-Benz site and relocated to Hambach on the French-German border, close to Stuttgart’s automotive talent pool.
While they would like to source closer to home, “Covid taught us that,” says Bjorn, their current 250-strong supply base spans Europe, South Africa, the US, Australia, China and Mexico.
Like most start-ups, INEOS Automotive had to build brand awareness and credibility from scratch. When sourcing began, it was completely unknown as a carmaker, making supplier engagement difficult.
Since then, it has partnered with industry giants. Its top 10 suppliers account for 70% of total spend, with the top two or three covering 40%. But even among these, not all have been financially stable. This has prompted the need for “plan Bs and back-ups.”
“We hope to be able to work with fewer suppliers in future and find ways of working together as partners where the supplier has skin in the game.”
Maturing Supplier Management
“We know we need to set a supplier strategy and be more proactive about managing risk, as well as make some make-or-buy sourcing decisions,” says Bjorn.
Supplier management is still “immature,” and the approach inconsistent. Many processes remain manual and labour-intensive.
“I tell people to treat [suppliers] just as they would wish to be treated themselves. We need to be a customer of choice and work harder than the more established brands to get suppliers on board.”
Bjorn says supplier interface currently happens across three business areas. He plans to establish a fourth pillar, a supplier management centre of excellence, to support the others.
“This function should help with all cross-functional integration. It is likely to include streamlined KPIs, reporting, systems, process implementation, continuous improvement activities, ESG, costings, IT, compliance, contract management and so on. Having this will enable the three other functions to concentrate on operational performance.”
A Unified Voice
Bjorn and his team are working to ensure suppliers view the company as a serious, professional partner.
“We now have one leadership team, we’re improving processes, and have plans to get IT working across everything internally.”
“Ultimately, we want to have one supplier interface and speak with one voice to suppliers, because from a supplier management perspective, it’s the right thing to do.”
Supplier Partnerships
With a large team and many priorities, focus is key. In March, Bjorn gathered 30 managers to select six workstreams from a list of 19. The chosen focus areas for the year include:
Supplier partnerships
AI in supply management
Training
Recruitment and retention
“I know what good looks like, I know exactly what I want to do, but I have so many priority areas that you can’t do everything at once.”
He wants to offer meaningful partnerships to the right suppliers.
“If you have suppliers who don’t want to work with you it’s just impossible, but for those that care about INEOS, for various reasons, not necessarily just more money or volume, there could be the opportunity to work on innovation projects or offer them exclusive rights.”
“To date we’ve only really produced one vehicle, so we don’t quite know what suppliers think of us. We need to act as salespeople as much as buyers and convince them we’re a serious and interesting prospect.”
“With transparency and trust, it’s a proper two-way street. We need to explain some of the innovative things we are interested in co-investing in with suppliers.”
The goal is to get suppliers involved earlier in the development process.
“We hope to be able to work with fewer overall suppliers in future and find ways of working together as partners where our success or failure is tied together, where the supplier has skin in the game. But that’s to come. For now, it’s about getting the supplier management working at the right level.”
Looking Ahead: Growth and Powertrain Innovation
INEOS is now focused on growing its market share and expanding its powertrain offering. It plans to produce petrol, diesel, battery-powered, hybrid and hydrogen-fuelled vehicles.
“We have networks to sell vehicles in more than 40 different countries, so we’re growing, people-wise and profit-wise. We’re standing on our own two feet, which is quite impressive for such a young company.”
Model Plans: More Powertrains and Vehicles to Come
INEOS Automotive followed the Grenadier with a pick-up truck called the Quartermaster, which is just starting to reach customers.
Next is the Fusilier, a smaller 4x4 giving customers the option to buy:
Fully electric
Or electric with a range extender, a small engine that charges the battery when no plug-in is available
This model is still in the design and sourcing phase. It will launch once EV demand and charging infrastructure increase. A fourth model is also planned.
“It’s important we build supplier strategies that link these together as much as we can,” says Bjorn.
The company ultimately aims to offer a diverse powertrain portfolio:
Petrol
Diesel
Electric
Hybrid (range extender)
Hydrogen-fuelled
INEOS unveiled its Grenadier Hydrogen Fuel Cell Technology Demonstrator at the Goodwood Festival of Speed in July 2023. However, it noted that fuelling infrastructure must improve before hydrogen vehicles become commercially viable.
