Savings of up to 16% in product groups, despite the Coronavirus pandemic

According to the latest Purchasing Managers’ Index, industry in the euro zone has been set on a growth course since March 2021, despite the whole Coronavirus pandemic At the end of March 2021 thePurchasing Managers’ Indexfor German industry stood at 66.6 points.

Source: Statista.com

Purchasing prices also continued to rise in tandem Above all, transport from overseas has become more expensive (see article of February 1, 2021), so too have electronic components, and raw materials in general. In these three areas, global supply simply cannot keep up with demand. This means that the supply issue is still tying up a lot of resources for companies and strategic purchasing issues often fall by the wayside. Price increases for purchased parts are then often simply accepted when they occur. Some of our customers have recognized this problem and have brought us on board as external project managers when strategic purchasing issues arise. We have achieved significant savings in cooperation with the customer’s team and through our structured approach.

The following points were key in this process:

  1. Data analytics were used to systematically identify parts that were similar but nevertheless differed in terms of should costing
  2. New suppliers were subject to a systematic tendering process to increase competitionamong existing suppliers
  3. 3. By means of a bundling and ordering matrix, we strategically realized economies of scale

With this structured approach, we realized savings of up to 16%. Due to the ongoing coronavirus situation, the project was implemented entirely virtually. The respective coordination and the entire project management took place in several online meetings.

Conclusion:

In an open innovation approach, corporate boundaries to the outside world are deliberately opened up. This facilitates targeted exchange with other stakeholders (customers, suppliers, competitors, development service providers). This in turn increases the knowledge that is essential to generate innovations.

We can thus only reiterate our advice to consider the three most important open innovation principles as expounded by Henry W. Chesbrough and to seek targeted exchange with external stakeholders:

  • Not all the same smart people work for you
  • If you make the best use of internal and external ideas, you will win
  • External ideas can help create value, but it takes internal R&D to claim a portion of that value for you

Has this article sparked your interest? If so, please contact us, or simply send me your question on the topic to raphael.schlup@coscomp.ch.