Automotive Suppliers:
Management Strategies & Value Enhancement
In today's vertically integrated market, auto manufacturers provide
less than 25 percent of a vehicle's value. The bulk of value (75
percent) is added by a network of key suppliers. As more automakers
depend on the capacities, abilities, and innovations of their first-,
second-, and third-tier suppliers, managing these relationships becomes
an essential core competency.
Automakers must focus on two things: assigning precise performance
requirements for their supplier partners, and specifying the economic
scope for that performance. A fair assessment of performance is the
basis for an effective partnership - it not only makes economic survival
possible but also builds trust among partners.
A.T. Kearney offers automotive supplier management strategies to help
companies in the automotive industry better manage their vendor
relationships. Through global sourcing, purchasing costs can be reduced
for the short-term. Through collaborative procurement, the cost of
materials is minimized over the medium- and long-term. Overall, these
strategies are designed to derive true value from suppliers and to meet
every company's unique needs.
A.T. Kearney's Automotive Supplier Expertise Includes:
- Analytical evaluation of price-performance ratios - we
work with the automotive manufacturer to determine strategic,
technical, and commercial direction, for example in global sourcing to
increase competition and acquire additional suppliers
- Collaborative cost reduction - we help automotive
companies develop extended value chains to capture, manage, access, and
leverage diverse product information in a collaborative, web-native
environment, solving issues such as security, network capacity, data
storage, and distributed processing
- Value-based sourcing - these projects improve the OEMs competitive position and make the most of suppliers abilities
- Strategic sourcing of indirect materials - companies in
the automotive industry can often improve their bottom-line through
strategic sourcing for office supplies, services, etc.
For a follow-up discussion, Contact The Automotive Consulting Practice.
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