Industry: Automotive

Procurement

Today, parts, modules, and systems from suppliers are responsible for about 60 percent of the typical added value of a car. That share will continue to grow. One of the central tasks of automobile manufacturers is to ensure the highest quality, flexibility, and cost efficiency of their supplier networks. Intense price competition in all markets makes procurement essential for competitiveness.

Cost efficiency

Automotive manufacturers and suppliers are under constant pressure to reduce their production costs. A rising number of derivatives, new vehicle functions, requirements for safety and fuel efficiency, and tighter legal requirements increase the pressure.

The Oliver Wyman approach to lowering product costs is based on profound industry expertise and includes a holistic toolkit that enables clients to achieve significant savings before and after the start of production. Additionally, Oliver Wyman possesses a deep understanding of international supplier markets to help clients improve their supplier portfolios and minimize procurement risks.

Increased quality, innovation, and flexibility

Purchasing organizations must closely manage the quality and innovation performance of suppliers, along with costs. Superior and consistent quality is increasingly crucial for OEMs. Suppliers are key sources of innovation, and OEMs must choose their partners carefully to ensure differentiating products. Flexibility across the full supply chain is crucial to enable OEMs to respond to market fluctuations and changes in customer preferences. Oliver Wyman helps automotive manufacturers develop high performing purchasing organizations to achieve these goals.

Risk management

In a world where supplier insolvencies or quality problems can quickly jeopardize the supply of key components, a comprehensive risk management system is critical. Oliver Wyman brings cross-industry expertise in establishing effective risk management processes and systems to identify and mitigate supply chain risks to the automotive industry.

Procurement Our Thinking