Material cost reduction “screen plates”
Goal: Saving of 2,000 EUR (22%) for sieve plates of a grain dryer by changing supplier Project
Project
Duration: 4 months
Role in the project: Project Sponsor and Mentor
Savings: Approx. 490,000 EUR (27%)
Operational area, geographical:
- Germany
- Switzerland
Company
Type: Mechanical / Plant Engineering
Turnover: 4 Bn. EUR
Number of employees: 16,000
Description
- As part of a cost reduction program, the screen plates for a product series were to be switched to a new supplier
- Through the introduction of strategic material group management, the complete material group was processed
Measures
- Analysis of the material group incl. supplier portfolio
- Product grouping
- Request for representative parts for each product group
- Offer comparison
- Supplier discussions with the 3 best suppliers in each case
- Optimization of the supply chain parameters at the supplier, in the warehouse and in purchasing
- Framework contract negotiation with the best supplier
- Presentation of the results to the sales manager and the product managers
- Conversion (run-in phase/run-out phase)
Team
- 1 Strategic Buyer (Team Leader)
- 3 Product manager
- 2 Development engineers
- 2 Operative purchasers (disposition)
- 2 Warehouse staff
Reporting
- Regular team meetings
- Informal updates to department heads
- Final presentation of the results to all departments involved
- Regular coaching meetings: strategic buyer and me
Interfaces
- Purchasing
- Product Management
- Technology (development)
- Disposition
- Stock
- Accounting & Controlling
Success
The expected savings were exceeded many times over. The potential of purchasing was recognized. Due to the fact that the project took longer than planned, but the potentials were recognized, additional resources were committed.
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