Challenges
One of the key challenges for this category was the frequent changes made to wire harnesses through engineering change orders (ECOs) in response to technical and quality concerns. These changes were isolated not only to model year changes, but also as running changes as needed. The client had over 7,000 unique SKUs in this category with a very high part turnover every year.
Approach
Claudia’s 7-Step Sourcing Process required the team to map the SKUs in a dynamic and sustainable way to allow correct quotation throughout the process steps, into implementation and then ultimately for all future product development. During the Site Vist step, the team gained a detailed understanding of each supplier’s competitive advantages, unique manufacturing approaches and core competencies based on harness type (e.g., simple vs. complex). This detailed understanding was utilized during the Supplier Selection step to develop a strategy that was focused on awarding harnesses by type while also limiting the number of suppliers on an individual vehicle platform to manage manufacturing complexity.
Results
The team realigned the supply base according to harness complexity which enabled the introduction of new globally competitive suppliers for the client. The resulting savings of 9% was bolstered by non-price benefits including Transparent Pricing Models, quality and delivery commitments and cost reduction idea generation to enable future joint cost reduction between the client and the supplier. The ultimate awards ensured that future capacity and flexibility were considered to maintain continuity of supply.
