Benchmark Automative Industry
The potential is a function of Supplier, Site and Category. Based on category spend and fragmentation (Suppliers and Number of sites)
The Strategic Sourcing Strategy is evaluated from a global perspective ( As-is and “Ideal” situation) The gap between as-is and the ideal situation indicates what end of the savings range should be targeted.
Chief Procurement Officer
A lead byer is most appropriate to balance local presence and global coordination. The lead byer can only succeed with right backing and global coordination.
The main task of the Chief Procurement Officer
- Agree overall procurement targets with management team
- Ensure management attention of procurement initiatives by presence in the management team
- Coordinate global procurement initiatives
- Define and decide category structure
- Assign lead byer category teams
- Confirm targets and plans proposed by lead buyer team and ensure they are aligned with global business plans
- Monitor and report progress of lead byer activities
- Potentially act as or directly support lead buyers for key global categories
Benchmark Procurement function
Characteristics of world class procurement organizations
- Mix of global coordination and local execution.
- Procurement seen as a core function of the business
- Organization strongly category focused with scope and mandate aligned with suppliers market AND internal user groups to fully leverage volume consolidation opportunities
- Procurement works as a catalyst in leading cross-function teams during sourcing projects, enabling use of advanced sourcing strategies.
| Dimension | Key areas |
|---|---|
| Procurement Strategy | Establish clear targets ( e.g. savings, sourcing coverage, contract coverage, complains |
| Organizational Alignment | Define and implement a global governance and mandate structure
Define Global/local categories and assign lead buyer responsibilities and mandate |
| Value-delivery processes | Establish a common set of sourcing and Supplier Relationship Management process Develop global category strategies for key categories. ( e.g. Hydraulics, Steel plates, Welded steel constructions, Pressed steel constructions) Further streamline transaction handling ( automated processes, business rules ) – minimize sourcing involvementDefine Global/local categories and assign lead buyer responsibilities and mandate |
| Supporting structure | Establish definitions and processes for procurement metrics Systems support for spend transparency. /span> |
Benchmark and proposal for sourcing strategy for the categories steel plated, welded and pressed constructions
Driving success to your business
The Supplier Base
The suppliers where Konga Bruk, Nitator (Oskarström and Hylte Bruk), Trading and Prestando.
Tine Carriage, Parallel rods and Steel plates represent together a spend of 108 MSEK of the total 245 MSEK in the category Welded constructions.
Sourcing strategy to reduce cost för Time Carriage, Parallel rods and links
This sourcing strategy could save 3-5 MSEK.
This will be achieved by transferring the Tine Carriages (low volume welding articles) from Nitator Oskarström to Litcon in Lithuania. The welding cost is 70 % of the total cost for a Tine Carriage and the Litcon welders are as good as or better than in Sweden. Nitator will focus on the high volume.
Nitator will invest in a new DUO robot cell for welding as well as a new process for the cutting operation. This will lower the cost by 5 % for Ålö.
In order to limit the number of subcontractors and become a larger customer the manufacturing of Paralell Rods will be moved from Konga Bruk to Nitator Hylte. Improved efficiency at Nitator in combination of synergies gives lower overhead cost.
Total saving for Ålö when using Nitator as single source supplier for Tine Carriages and Parallel Rods is estimated to be 3-5%, approx. 2-3 MSEK.
New sourcing of steel plates from Czech Republic would save 15% or 3 MSEK. Tech center has a State-of-the-art laser cutting capability and one operation eliminated in combination with lower wage means a reduction of cost.
Experienced - Committed - Partnership
