Improvement and management of procurement processes at an automotive supplier
Challenge
Tier-1 automotive supplier confronted with extraordinarily many and high price increase demands from material and part suppliers – Previous dysfunctional process to negotiate down and pass-through price increases to customers to be improved and managed
Approach
Conceptional process improvement
Clarifying expectations of different stakeholders
Specifying the process scope to addressable spend for production materials
Identification of pain points of the previous process through cross-departmental workshops (e.g. Purchasing, Sales, Business Units, Controlling), expert interviews and own observations
Derivation, prioritization, and introduction of process improvements as part of a holistic process revision
Documentation and visualization in management presentation, work instructions and Business Process Modeling Notation (BPMN) workflows
Design and implementation of a rollout plan including conducting trainings
Operational process management (PMO)
Challenging buyers in dealing with price increases
Ensuring process adherence and documentation quality
Planning and scheduling and meetings with stakeholders
Documenting anydecisions
Regular tracking & reporting for the Board of Directors
Managing any escalations
Process analyses
Analyses of price increase effects per commodity, region, business unit
Recommend approval thresholds to balance cost control and workload
Result
Introduction of a revised process to all stakeholders’ satisfaction