Supply Chain optimization for electronics manufacturer
Second source supplier for an innovative consumer electronics company
Our client is an innovative consumer electronics company which has been acquired by a private equity company a few years ago and was recently listed.
Due to our client’s focus on significant growth as well as accelerated internationalisation, supply chain structures lagged partially behind. Furthermore, subsequent production efficiency gains and scaling effects have not been passed to our client, leading to suboptimal purchasing conditions. The acquisition by a private equity company was intended to optimize operations to further increase the value of the company.
Objectives: Optimization and risk mitigation in supply chain
The focus was to reduce supply chain shortages during the global pandemic by implementing second source suppliers and achieving cost savings through negotiations including incumbent suppliers. In addition, a logistics concept had to be developed for the company’s global expansion plans, and time to market processes had to be shortened by implementing a product lifecycle management (PLM) platform and improving product development processes.
Approach: Professionalizing procurement processes
During the opportunity analysis we conducted a thorough assessment of our client’s operations including supply chain risk heat maps, time-to-market performance benchmarks as well as production costs analysis with multivariate regressions, linear performance pricing and detailed bottom-up should-costings.
With this in-depth analysis, we approached established as well as new suppliers to negotiate favourable purchasing conditions with significant cost improvements. Driven by pressing supply chain risks as well as our client’s plans to expand into global markets, the establishment of a 2nd source supply network in Asia as well as selected nearshoring capabilities for strategic product developments were paramount during our project.
Besides global supply structures, international logistics were another critical factor to implement our client’s expansion plans. Together with our client we conceptualized a holistic logistics concept and tested it through several RFI iterations with multiple logistics providers.
Due to our client’s exponential growth, processes as well as organizational structures were partially undefined. Together we assessed the maturity of the supply chain and procurement functions and defined the optimal size and necessary roles of the organization. Furthermore, we assessed product development processes in multiple cross-functional workshop to develop a future proof process landscape, which we enabled through digitization by identifying and contracting a best-in-class Product Lifecycle Management (PLM) platform provider.
Our results
- Double-digit savings delivery in million Euro
- Established of a multi-source supply chain network with focus on Asia as well as selected highly innovative nearshoring suppliers
- Developed a procurement, supply chain and quality management target operating model to support the company’s growth ambitions
- Shortened time-to-market lead times and improved product development processes
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