Driving Change: Your Guide to Automotive Procurement Transformation – A Video Series
The automotive industry is standing at a crossroads, grappling with disruptions that demand agility, innovation, and strategic foresight. Electrification, autonomous technologies, and changing ownership models are reshaping the sector, forcing OEMs and suppliers to rethink their approaches.
At the heart of this transformation lies procurement—no longer a back-office function but a critical enabler of profitability, resilience, and competitive advantage.
Through this exclusive video series, gain insights into a revolutionary procurement operating model that empowers leaders to steer their organizations toward sustainable success. Discover expert guidance, actionable strategies, and transformative frameworks tailored to the automotive industry’s evolving needs.
What are the main challenges currently being faced in the Automotive industry?
The automotive industry faces unprecedented challenges Electrification, Autonomous driving, New ownership models culminating in the software-defined vehicle of the future!
The BIG3 disruptions are forcing a long-term shift in the automotive profit pools – away from classic ICE-driven and towards new mobility-driven products. In fact, until 2035, growth will only come from these emerging profit pools.
Simultaneously, OEMs see themselves in a market that is very likely to stagnate, due to saturation and new ownership models.
Procurement functions are in the perfect position to anticipate and mitigate the risks and opportunities presented by these challenges. They can support a transition into new mobility strategies for companies whose pedigree rests on a century of excellence in mechanical engineering.
So what needs to change in general? And what role does procurement play?
In navigating the electric vehicle transition, OEMs and suppliers need to rethink their operations.
The usual way of working – along the entire development and production process – is not fit for the new market, which requires increased agility and speed.
This is especially true for procurement, which is exposed to new products, suppliers and market dynamics, and needs to adapt quickly.
60% of OEMs and suppliers have yet to even start adapting their operations to these new realities. They are aware, yet global events such as Covid and the semi-conductor shortages have put them behind schedule.
Procurement is at the sharp end of many of the industry’s most pressing challenges and thereby a pivotal lever to:
- Handle huge cost pressures,
- To Effectively manage the value chain, and
- To Identify new market players.
Yet, the standard approach to procurement in automotive is just not agile enough.
It now has to handle product strategies and integration details with drastically different materials, suppliers and sourcing challenges.
At the same time, it also has to provide the profit margins to fund the journey to innovation and new technologies.
What is key in procurement?
The automotive industry needs a new strategic procurement approach: That’s why INVERTO developed a Strategic Automotive Procurement Model.
At its core is the idea that industry players – OEMs and N-Tier suppliers alike – must become more flexible.
The model clusters automotive procurement into 6 categories which reflect the new structure of the auto industry from the perspective of established OEMs and N-Tier suppliers: Components, xEV, Software and Application, Autonomous Driving, Extinction, and Services and After Sales.
Each of these six categories has different attributes and requires a distinct approach that draws on the procurement strategy matrix.
That covers six dimensions such as Sourcing Model and Incentives, Commercial and Technical Levers or Risk Management.
The model helps to decide the best way to address different procurement needs and find the right approach for it.
CEOs need to act now, and decisively. Procurement needs to be at the heart of the transformation, maximizing value and optimizing costs for a completely changed industry.
It’s time for procurement teams to revamp the old playbook – the mission is to innovate at every step of your operation!
Do you have any further questions? Then contact our experts!
