Generating savings in the automotive industry on casting components

Client background

Our client, a leading Automotive Tier-1, was looking for new opportunities to optimize its purchasing strategies and reduce costs by leveraging its existing data. We have started modeling a pilot on the Aluminum Die Casting category with more than 200 components across 3 regions and 5 suppliers

Our way of finding savings

Identify savings opportunities

Using the Control Tower module of EasyKost, we have been able to evaluate precisely to amount of potential savings resulting from the suppliers’ pricing discripencies. Easykost was able to set-up the negotiation targets by supplier and by Part Number. For each suppliers we picked up the top products generating 80% of the identified savings. Utilizing the Batch estimation, we have also been able to identify the optimized product reallocation scenario across the different suppliers.  

Using the plastic injection model to capture savings

The EasyKost plastic injection model and the control tower have been used by the procurement teams across the different Business Units in order to prepare and execute the negotiations. Using the “Product Similarity” functionality has been key to show-up the pricing inconsistencies to the suppliers on specific examples during the negotiations.

The following were the most received feedbacks from the regular users of the model :

• Big savings opportunities identified from EasyKost Control Tower on unexpected components
• Easy to use interface of the Control Tower which allowed for quick decisions

Application to client’s other categories

After this first success, the client has deployed the same process by leveraging the easyKost models of other categories with similar results

Results

Many metrics were used to track the success of the initiative. The below numbers are the main takeaways of this business case: