A new era in purchasing initialized

Case Study

Facing the challenges of new business models, agility, disruptive technologies, etc. a German OEM made its way to transform its purchasing department with all the consequences that entails. By developing new target working models, we supported to transform the OEM’s purchasing department in a groundbreaking way to achieve its ambitious cost targets.

Staying competitive in disruptive automotive times

Disruptive developments in the strategic automotive pyramid will change the role of OEMs – requiring a fundamental adoption of work, processes, and structure within purchasing. An OEM sought to close the plan / target gap (HR-cost) via sustainable, lean-agile-oriented change of processes. The challenge was to develop a strategic concept, including key initiatives to create the vision for “Purchasing 2025+” and start the needed transformation.

Companies need to operate in a more and more complex world

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Groundbreaking transformation of commodity operations

To understand the challenges, we executed the following aspects:

Existing strategic challenges,
Purchasing Performance Benchmark,
Employee Survey
Design of the future target picture incl. the definition of best-fit working models Speed, Efficiency, Agility
Setup of transformation roadmap and delivery

This approach was backed-up by a strong top Management involvement and cultural change toward agile working principles.

New work project example

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The unexpected realized – target over-fulfillment

Based on the three work models, more than 30 purchasing key activities were successfully identified and implemented – along the action fields of Governance, Structure, Process, Culture, Footprint, and Finance. The HR cost gap was not only closed, but over-fulfilled by more than 30 percent. Lean-agile principles were integrated, and a cultural change successfully launched.

TC’s project experience shows that purchasing transformation can save up to 30% of purchasing costs

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In order to cope with the challenges of a new era, enterprises will need to transform their purchasing department. To stay competitive, companies need to understand how many resources they wish to dedicate to which activities. Our generally valid strategic target operating model gives an overall framework to derive strategic actions and to transform into a lean-agile purchasing department.

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