Automotive Maintenance Case Study
Optimizing the procurement process
Summary:
Looking for ways to reduce costs, our client sought the expertise of Core Systems. Our team of field experts collaborated to help craft a solution that would bring efficiency and increase productivity to the client’s current operating model. After implementing the strategic sourcing solutions recommended by Core Systems, our client was able to achieve sizeable cost reductions by standardizing internal procedures company-wide, centralizing procurement and enhance training opportunities to key leadership on the management team.
The Client: Automotive Industry Professionals
Our client provides a full range of vehicle auction, reconditioning, logistical and other vehicle-related services to meet the remarketing needs of both its institutional and dealer customers. The company’s rapid growth through acquisition drove a need to adopt and integrate an efficient operating model that would ensure increase profitability.
The Challenge: Supporting Rapid Growth Through Strategic Sourcing Solutions
The rapid growth of the client did not allow them time to create and cultivated an efficient operating model. Upon recognizing inefficiencies within their processes were leading to a decrease in revenue, our client sought the advice from experts at Core Systems. After several collaborative meetings with the client to identify objectives and major areas of concern, our team presented recommendations for a strategic sourcing solution that would reduce costs and drive productivity.
The Solution: A Targeted Approach to Increasing Annual Revenue
In an effort to sustain rapid growth within the automotive industry, the client enlisted the help of the experts at Core Systems to create a solution that would reduce costs and increase productivity. Our team recommended a targeted focus on purchase price variance that called for centralizing the procurement functions to leverage specific commodity and service volumes over fewer vendors. In doing so, our client was able to streamline their internal procedures site-wide leading to increased productivity and add efficiency.
The Core Systems team also offered solutions on implementing effective methods for development and installation of a high-performance metrics system that would speed up inventory turns, cycle times, increase productivity, and emphasize the need for extensive training for all leadership within management roles.
By week 18 of the project, our client was saving over $5 million per week, leading them to a cost reduction of $25 million annually.
Results: Strategic Sourcing Solutions Save Millions
The rapid growth of the client did not allow them time to create and cultivated an efficient operating model. Upon recognizing inefficiencies within their processes were leading to a decrease in revenue, our client sought the advice from experts at Core Systems. After several collaborative meetings with the client to identify objectives and major areas of concern, our team presented recommendations for a strategic sourcing solution that would reduce costs and drive productivity.
About Core Systems
Core Systems is a transformation advisory firm focusing on growth, innovation, acceleration, reimaging companies… Therefore, we set high standards, make a difference, show respect, embrace innovation, build open and honest relationships, do more with less, and maintain a posture of humility and grace to all.