| Client | A global leading tier 1 supplier in automotive industry |
|---|---|
| Sector | Industrial market and manufacturing |
| Project | Cost optimisation and category management |
Client challenge
After an integration of a German tier 1 automotive supplier, our Chinese client wanted to realise cost savings for their global plants based on direct and indirect procurement cost reduction. In addition a worldwide central led organisation with defined strategy, clear processes, qualified employees, e-sourcing tools, reporting tools, guidelines etc. should be set-up to maintain the achieved savings level.
Key activities
- In phase 1 of the project, KPMG created a global spend transparency and identified cost saving opportunities based on value lever workshops with cross-function teams in the client main plants. Savings initiatives have been planned including next steps, timeline and responsibilities. In addition the procurement maturity level covering processes, tools, skill level and methods of the client was assessed. After identifying the major gaps and actions to close those gaps, a roadmap of improvement has been created for the client.
- In phase 2 of the project which took 20 months, KPMG implemented the identified cost saving initiatives. This included a quick win phase, focusing on negotiations with key suppliers per category supported by benchmark data and should cost calculations. Wave 2 and wave 3 of cost savings included initiatives with internal or external process changes, VA/VE methods, or supplier changes. Categories implemented: aluminium die casting, sheet metal, stamping, cold forming, outsourced labour, adhesives, MRO, logistics, maintenance, IT equipment etc.
- In addition a best-in-class target operating model for the client has been designed and implemented: A new more centralised organisation structure got created, roles and responsibilities have been defined, training of employees conducted, category management improved and processes have been adapted.
- A procurement IT tool was tendered and implemented globally.
Outcomes
- Standardised and optimised procure-to-pay processes, which are realised through Coupa, covering 100 entities in China and U.S. branch, more than total of 1000 users.
- Improved user experience and the efficiency of P2P processes.
- Enabled more than 200 suppliers on Coupa at the time of Go-Live, and equipped the client with the capability of supplier enablement.
- Transformed and redefined the procurement’s operational roles and structure in transition to establishing a corporate shared service centre.
