Automotive

Sourcing Strategy for a Leading Automotive OEM


Situation

A major automotive original equipment manufacturer (OEM) with multiple joint ventures in China sought assistance to develop a coherent sourcing strategy. This client wanted to create and maximize synergies across its varied global operations, but was unable to do so because of its decentralized structure.

Approach

BCG conducted extensive data analysis on sourcing expenditures and then developed a sourcing strategy that specified a future supply base, a list of strategic and affiliated suppliers, and a supplier development program. We also led client teams tasked with the design, planning, and implementation of entity-wide sourcing initiatives.

Impact and value created

Guided by BCG’s expertise, the client was better able to share its supply base among its various joint ventures, and ultimately, to reduce the number of its suppliers by one-third. Working with the client’s purchasing team, we also helped develop a road map for quality improvement and a cost reduction plan.

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