From fragmented sourcing to strategic procurement
Situation
A leading European automotive manufacturer sourcing more than USD 50 million annually from China wanted to strengthen procurement performance while reducing costs across engine components and connecting rods. Although the company had already implemented initiatives such as warehouse consolidation, inventory optimization and commodity-based procurement teams, management recognized that greater value could be achieved through a more strategic procurement model.
Key challenges included:
• Procurement activities in China required stronger local leadership and execution.
• Existing sourcing initiatives delivered improvements but did not fully maximize commercial potential.
• Supplier management and procurement processes lacked strategic integration.
• Purchasing volumes, product portfolios and supplier relationships required optimization.
• The business wanted to accelerate both short-term savings and long-term procurement capability.
To support its transformation, the company appointed EPG as an extension of its procurement organization in China, combining operational execution with strategic sourcing expertise.
EPG Contribution
Working as an integrated part of the client’s procurement organization, EPG developed and executed a strategic sourcing program focused on maximizing purchasing power while improving procurement efficiency and supplier performance.
Key initiatives included:
• Consolidating supplier volumes to increase purchasing leverage.
• Standardizing products and identifying value engineering opportunities.
• Strengthening supplier governance and commercial negotiations.
• Optimizing procurement processes, logistics and inventory management.
• Consolidating purchasing volumes across categories and business units.
• Supporting supplier development, quality improvement and product innovation.
• Improving payment terms, sourcing strategies and contract management.
• Building a scalable procurement model to support future business growth.
Business Outcomes
Operating as the client’s procurement organization in China, EPG transformed procurement into a strategic business function that strengthened supplier performance, increased commercial leverage and delivered substantial financial value.
Key outcomes included:
• More than USD 7.5 million in verified procurement savings within 12 months.
• Increased purchasing power through supplier consolidation and strategic sourcing.
• Improved procurement governance, supplier performance and commercial negotiations.
• More efficient procurement processes, inventory management and logistics coordination.
• Stronger supplier collaboration supporting innovation and product development.
• A scalable procurement organization capable of supporting long-term operational excellence and business growth.
Client Confidentiality
To protect our clients’ commercial interests and confidentiality, company names have been omitted. All business cases are based on actual client engagements and measurable procurement results.
