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Case Studies

Sourcing & Procurement

Fact-based negotiations and spend optimization for a global automotive OEM

A global automotive OEM faced high steel prices due to poor data governance. Applied Value delivered a full steel sourcing toolbox and training to produce 52 MUSD in savings.

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Situation

One of the largest automotive OEMs was faced with poor data management and processes for steel spend. The client was not using price breakdowns to ensure they were getting the best prices or cost granularity to optimize their supply base. Applied Value was tasked with building tools and processes to determine the best cost scenarios and re-balance the portfolio of steel spend amongst current suppliers to achieve optimal pricing.

Approach

Applied Value created a steel parts database, a steel price calculator, customized RFQ matrices with granular breakdowns, and several additional optimization and analysis tools. Applied Value also led negotiations with suppliers and provided Fact-Based Negotiation templates for repeatability. Lastly, AV outlined new ways of working and an implementation plan for training staff to execute on the change management process.

Results

Applied Value delivered a full steel sourcing toolbox and training to the client team for process maintenance and future use. The identified savings in steel costs amounted to 52 MUSD through FBNs with suppliers.

52 MUSD million USD

COGS savings

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