Automotive global supplier: generating value from sourcing

​Background

 

The client, an global automotive supplier with sales of over €900m, having achieved significant growth through acquisitions, was facing market pressures  for cost reductions and responsiveness. 

As a result of this, a major transformation programme was launched, of which the optimisation of the supply chain was a critical element.

What We Did

  • Carried out a Make v Buy exercise, identifying opportunities to outsource non-strategic product lines to low cost sourcing.

  • Rationalisation of the product portfolio, eliminating the complexity generated by the poor integration of acquisitions. 

  • Assisted in the setting up of a new Sourcing Organisation, including developing the processes and capabilities required to support the business

  • Supported the formulation and execution of sourcing strategies for each commodity with different characteristics, supplier relationships and opportunities

Results

 

  • Standardisation of purchased parts, reducing  part numbers by more than 50%,

  • Achieved 7% short term savings  and medium-long term savings up to 18%

  • Sourcing from low cost countries of low risk commodities, realising a 35% cost reduction.

  • Reduced footprint by moving non-strategic product lines  to a supplier in India. 

  • A new sourcing organisation and robust management processes capable of supporting the business through the whole product life cycle.

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