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, the value of the purchasing manager index for industry in Germany was around 66.6 points.
At the same time, purchase prices have risen widely. Transport from overseas in particular became more expensive (see article from 01.02.21), as did electronic components and raw materials in general. In these three areas, global supply is simply unable to keep pace with demand. This means that supply issues still tie up a lot of resources for companies and strategic purchasing issues often fall by the wayside. Increases in the price of purchased parts are then often simply accepted. Some of our customers have recognized this problem and have involved us as external project managers for strategic purchasing issues. We were able to achieve significant savings in cooperation with the customer’s team and through our structured approach.
The following key points were important:
- The use of data analytics made it possible to systematically identify similar parts with deviations in “should costing”
- Systematic tenders for new suppliers have increased competition from existing suppliers
- A bundling and ordering matrix was used to strategically realize economies of scale
This structured approach enabled us to realize 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:
The deliberate opening of the company’s boundaries to the outside world through the open innovation approach allows for a targeted exchange with other stakeholders (customers, suppliers, competitors, development service providers). This in turn makes it possible to multiply the knowledge that is essential for producing innovations.
Accordingly, we can only repeatedly appeal to you to consider Henry W. Chesbrough’s three most important Open Innovation principles 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 piqued your interest? If so, please contact us or simply send me your question on the topic at raphael.schlup@coscomp.ch.