Automotive OEM
Sourcing Value teamed up with a global automotive OEM to help establish a master coil resale program and optimize the value chain for flat steel. The client was sourcing slit coils from both processors and mills, relying on those suppliers to quote and manage both the material as well as processing costs. Sourcing value helped to define the master coil strategy, negotiate new pricing with optimized suppliers and implement a process to manage the program going forward.
Solution and Analysis Provided by Sourcing Value:
- Master Coil Program strategy and approach
- Visibility of material relationships from Master Coil to final end component
- RFQ and Fact-Based Negotiation support separately with both Mills and SSCs
- Incorporate of strategic and technical constraints in scenario analysis
- Establish a traceable and audit compliant program
- Formalize scrap recovery process
- Visualize program P&L to track payment and volume flows
Results
- $50 M annual savings 3.5% from steel year-end negotiation by utilizing tools including optimization and benchmarking
- Budget impact updates aligned with negotiated pricing in supplier agreements and market/cost indices for index-based contracts
- Budget sensitivity analysis based on market/cost index movements