Challenges
Friction materials presented a unique challenge due to the lack of suppliers available to utilize globally.
Client’s part volumes and the inclusion of parts utilizing legacy technologies and materials also presented limitations in the type and number of suppliers who were interested.
Additional challenges occurred due to the lack of ownership of IP and drawings, and the need to utilize Product Cards for quoting.
The largest incumbent supplier also had an expiring contract with a unique “Last Look” clause in the contract that impacted the business award timeline.
Approach
Due to the sensitivity around intellectual property, during the Develop RFP step the team worked with the Driveline Design Engineering, Test Engineering, Quality Engineering and Platform Engineering teams to create comprehensive product cards (including information about performance, fit, testing requirements, etc.) to enable accurate quotes from the identified supply base.
While selecting suppliers for Site Visits, the team focused on suppliers who were capable of producing large ranges of quantities (<1K to 200K+ pieces per year) and prioritized suppliers who were on the cutting edge of research and development and testing for Friction Materials.
During the Supplier Selection step, the team specifically chose suppliers who prioritize off-highway markets and their associated volumes, were fully vertically integrated, and provided redundant capacities to each other.
Suppliers were awarded business based on their competitiveness in the market, their internal capabilities (e.g., having paper production in house) and their ability to produce both low-complexity friction materials and their ability to produce and develop high-complexity friction materials.
Results
- Identified $6.4M annualized savings
- Introduced several new suppliers, including one development supplier, to reduce supply dependency
Developed a sustainable sourcing strategy based on friction material type
