Leading Automotive Components Manufacturer Identifies Best Cost Sourcing Destination for Better Cost Savings
Business Challenge: Issues with identifying 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.
Situation: The client lacked understanding of the key destinations and how to qualify them
The client was interested in understanding if they could procure a set of raw materials from 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.
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 client’s procurement pattern and spend levels. We started with an assessment of benefits to quantify the possible savings opportunities, followed by identification of potential sourcing destinations and shortlisting them based on the exact procurement needs of the client. 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 client 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 making effective go/no-go decision.