How an aircraft OEM used EPG to give procurement a lift
BACKGROUND
A major aircraft OEM struggled in delivering on time and on budget, a situation complicated by rising raw material prices and limited collaboration with suppliers.
Aircraft asked EPG to diagnose the root causes of these challenges, develop and evaluate alternative suppliers, identify ways to reduce the costs and improve supplier relationships.
APPROACH (at a glance)
EPG managed the day-to-day procurement activities in China to reduce operational costs and ensure that the company's supply chain was robust and flexible enough to support their continued expansion rather than blocking it.
We provided support in five ways:
• Developed a top down target plan on current outlook.
• Conducted RFx that could be benchmarked against industry best practice.
• Created and implemented detailed sourcing plans per each category for quick vs long wins.
• Conducted fact-based negotiations.
• Developed analysis of major problems and bottlenecks among some of the suppliers to understand right capability development.
RESULTS
These actions trimmed more than 15% cost savings in key procurement categories. Equally important, the company was well-positioned to meet production demands.
* We take our clients' confidentiality seriously.
While we've not included their names, the results are real.
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