Automotive supplier achieves 38%+ savings with supply chain optimization
The customer
A global Tier 1 automotive supplier.
The challenge
As part of its ongoing commitment to YOY savings and client cost effectiveness, DSSI engaged its client in an OEM spare parts supply chain optimization project in the EU. Both DSSI and our customers recognize that while the machine builder may be manufacturing or customizing some parts within their machines, many spare parts are products that can be bought either through distribution or through the manufacturer for advantaged conditions (pricing, terms, delivery performance).
Our past success with this client’s U.S. locations had yielded significant savings results and, given DSSI’s vast supply base relationships, we felt confident we could replicate the results in another region.
How we solved it
Armed with the goal to identify the actual manufacturer name and part number for spare parts sourced through the original machine builder, we went to work. The DSSI buyer that was dedicated to this particular site in Czech Republic worked with the site users over the course of two weeks to identify the manufacturer name and manufacturer part number for 65 of the highest use spare parts from Frimo, Engel and 3CON representing over 1.3M CZK in annual spend.
We then conducted a sourcing event including its preferred suppliers for each category, and in some cases the specific manufacturing line, such as Siemens, Sick, Balluff and others. Within two weeks, the DSSI team had identified 51 of those items as being able to be purchased through distribution versus directly from the OEM and had completed its competitive sourcing activity.
Results
- 38.55% savings, representing 532K CZK in annual savings..
- Greater visibility into OEM spare parts management spend.