Supplier base reduction
In multinational automotive company we worked on streamline supplier base. The result of that was higher than any expectation. We decreased the direct material supplier base by 60%. How we did it? On the beginning the situation was that in system were existing huge number of discrepancies and incorrect data. So step number one was to check every single supplier in the system. It means to in about 1000 suppliers to check what they supply, when their last delivery occurred, whether the project is still active or whether there are not more suppliers with similar name in the system. It means also to check all 1000 websites. The biggest supplier decrease is related exactly to this exercise. Subsequently after this cleaning we added to every supplier the list of preferred strategic suppliers which could be considered for resourcing. That means to check every single drawing which supplier delivers and to add it to correct subcommodity and subsequently to identify new potential suppliers. In reality it meant about 1000 drawings. Thanks to this activity the purchasers were finally clear about who supplies them and what. And as additional bonus of the supplier streamline took place the consolidation of payment terms.
