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Automobile & Industrial
Market Perspective
Ensuring Supply Continuity and Controlling Material Costs
Purchasing executives will not soon
forget the challenges of 2004 to 2006. A number of
factors contributed to a difficult environment, especially
for companies that rely heavily on an extended network of
suppliers for their finished parts, components and
assemblies.
These factors include:
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Raw material volatility
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Inflationary energy costs
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Consolidation of steel production
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Higher volumes of outsourced of
production parts, components and assemblies,
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A greater focus on leveraging low
cost country sourcing and
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Financial pressures on the US part
manufacturing community
Raw material
cost and availability is consistently cited as the leading
factor for missed earnings and shrinking profits.
The factors cited above highlight
the need for OEM’s and their suppliers to adopt new
approaches to controlling costs and managing the
increasing financial and operational risk associated with
material supply.
With raw material inputs
representing anywhere from 25 percent to 75 percent of
finished part costs, its imperative that OEMs understand
the cost drivers affecting the materials that flow into
their purchased parts, and actively control and coordinate
how materials are selected, sourced, and processed by
their extended supplier network.
To learn more
about how Newview is helping Ford, Delphi and other
companies manage supply risk and price volatility on
behalf of their extended supplier network, read the
Ford Motor Company Case Study below: |
