Challenges
Two major challenges for this category were ensuring that new product development and technology partners were maintained but also had lower cost options available to remain competitive.
Our client was looking to remain competitive in the aftermarket, which is a highly saturated market with many manufacturers producing alternate options.
The other major challenge was addressing an incumbent which had 80%+ of the business and the risk associated with the possibility of shifting business to other suppliers.
Approach
Utilizing the Claudia 7-Step Process the team achieved the desired results for the category.
Some key advantages realized through the process include:
During supplier research the team was able to identify both alternative large OEM filter suppliers and over 20 new alternate aftermarket suppliers who currently were doing like parts.
During supplier selection the team created a new company strategy to separate original equipment filters and aftermarket filters to help drive supplier selection and determine a part award strategy for the company moving forward.
Through the new strategy the team achieved having multiple sources for filters in the case of any shortage of supply in the future.
Results
- Over 25% savings
- Supplier rationalization of over 80%
- Select strategic partners were identified across the subcategories to be either a design/OE partner or an aftermarket partner to ensure design capabilities for new parts and competitiveness in the aftermarket space
- Two major alternate original equipment (OE) suppliers were introduced to ensure competitiveness while ensuring an adequate amount of business would be given to each supplier to maintain strategic partnerships
