Business Challenge: Automotive components manufacturer needs to identify best cost sourcing destination
A leading automotive components manufacturer with operations across Europe wanted to assess the possibilities of sourcing a set of raw material categories from best cost sourcing destinations. With a further aim to improve on cost savings, our sourcing intelligence team set out to find the best solution for the client at the fastest turnaround time.
Situation: The automotive components manufacturer was unsure about the key destinations and how to qualify them
The client was interested in understanding if they could procure a set of raw materials from the best cost sourcing destinations. However, they were concerned about the quality and operational difficulties, as they had a set supplier base and had not tried exploring alternative options in the past.
Approach: Identified and developed recommendations on opportunities for sourcing raw materials from best cost sourcing destinations
We took a systematic approach to identify, assess, and recommend on the best alternative sourcing destinations based on the automotive components manufacturer’s procurement pattern and spend levels. We started with an assessment of benefits to quantify the possible savings opportunities for the client, followed by identification of potential sourcing destinations, and shortlisting them based on the exact procurement needs of the automotive components manufacturer. We also identified potential risks with sourcing from the shortlisted destinations and developed recommendations on the mitigation strategies.
Impact: Client gained detailed understanding of possible best cost sourcing destinations and associated benefits and risks
The automotive components manufacturer explored the possibilities of procuring from alternative destinations and the potential benefits. They were clear of all their concerns about taking an unconventional approach of sourcing from emerging markets. We also highlighted the potential risks associated with sourcing from the identified destinations and mitigation strategies for automotive components manufacturers.