We anticipate that our selling prices will again decline. We shall make every effort to mitigate the impact of such falls by improving our Group-wide purchase management system. Together with our partners and suppliers, we are working on ways of further reducing our costs. In this context, we have had particular success with our ProImprove program.
As a means of reducing costs, we bundle our requirements and place orders through our purchase management system. One of the most important considerations in this respect is to focus on the best-performing suppliers and to continuously increase their proportion of purchases. We judge suppliers on their ability to innovate and maintain a consistently high level of quality and performance. We also support our partners by working with them to define, develop and optimize targets, methods and processes.
We continue to internationalize our purchasing activities by increasingly obtaining the materials we need directly in the provider’s own country. This also reduces our exposure to fluctuations in the U.S. dollar. Here, too, in line with our general purchasing policy, we act in accordance with a defined code of conduct and monitor compliance with this code as part of our supplier management system.
With regard to production, we shall again exploit all the opportunities for flexibility offered by our global production network in order to compensate for the impact of higher materials prices on the purchasing side and lower sales prices on the market side. In particular, we aim to push ahead with the expansion of our production site in Shanghai. Another way in which we are able to boost efficiency is through the increasing use of platforms and the integration of modules and standard components in the manufacturing process. This enables us to keep production costs down and make additional savings through standardization on the purchasing side.
In the area of logistics, too, we shall endeavor to make further improvements to our own processes and those of our contractual suppliers. One of the means of achieving this will be to link more suppliers to our ERP (Glossary) system.
