Procurement Transformation and Localization: A Gearbox Manufacturer's Success

In this video, we share the inspiring journey of one our clients, a high-end gearbox manufacturer based in Germany, with a global presence in over 50 countries. With more than 8,600 employees and an impressive annual turnover of over 2 billion euros, this company is a true industry leader.
The story begins when the company underwent a significant transformation-it was carved out of a large, globally active parent group, and acquired by a private equity investor. This change brought about the challenge of establishing new structures, especially in indirect procurement, which had to be completely overhauled due to its departure from the parent company.
With concerns over the loss of synergies, organizational structure gaps and potential cost disadvantages, our team stepped in to assist the investor and turn the situation to their advantage. Bringing unconventional ideas and harnessing the new-found flexibility, we collaboratively crafted a procurement structure that perfectly aligned with their specific requirements.
Yet, we didn't stop there! Our dedicated team helped them establish a new procurement function for indirect spend-defining competency profiles and implementing tailored training measures to adapt to the company's fresh circumstances. The newly formed team proved its agility and efficiency in successful lighthouse projects, delivering real added value to the company.
As for direct procurement, the company was already managing it autonomously. Challenges remained, however, especially in navigating a tough economic environment and optimizing processes in Asian markets. So, we took on the task of enhancing localization in China and India, and demonstrated the remarkable efficiency of doing so.
Here's how we achieved this:
1. Implementing Spend Analytics: We utilized our Data and Insights solution to quickly organize, classify and report on spend, helping identifying opportunities for our client.
2. Scouting Supplier Options: Leveraging our supplier database and AI-powered market information, we explored potential suppliers.
3. Optimizing RFI and Supplier Engagement: During the RFI phase, we communicated with suppliers to foster motivation and collaboration.
4. Managing RFQs and Final Negotiations: The best-fit suppliers were contracted after productive negotiations.
5. Enabling Supplier Ramp-up: We closely supported our client during the introduction of the new suppliers, nurturing strong partnerships and encouraging local supplier development.
The outcome? The successful establishment of a local supply base in India, boosting the share of total spend in Asia to around 50% through re-localization. Additionally, in collaboration with our client, we achieved remarkable savings of over 100 million euros, with more than half of it being accomplished in the very first year.
Moreover, our dedicated efforts led to the creation of a professional procurement organization for indirect spend-delivering sustainable performance improvements, and paving the way for our client's future success.
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