Procurement trends in the automotive supplier industry
|The great majority of challenges for purchasing in the automotive supplier industry results from changes in framework conditions on the outside of companies. Yet, concrete procurement functions can be allocated to them. Most challenges considered relevant for purchasing in the automotive supplier sector concern the area of supplier management. This includes subjects such as handling increasing costs, ensuring competitiveness, guaranteeing the security of supply, as well as quality management. The subject of global sourcing ranks second. This topic can be expected to further increase in importance due to the high cost pressure and the progressing internationalization of sales markets. Other important challenges relate to supply chain management. This includes cross-company procurement of new technologies, comprehensive optimization of logistics and warehousing, as well as ensuring fast and secure supplies to customers. Additionally important are subjects such as legal framework conditions, increasing environmental standards, as well as organizational and financing issues (Abbildung 1). |
A comparison of the expected developments for the sector and the challenges for one's own enterprise shows that many developments are noticed, in fact; yet, they are not understood as challenges for one's own enterprise. Increasing energy prices, the compliance with social standards at subcontractors, the increasing internationalization of purchasing, and more restrictive lending policies of banks are deemed to be especially issues for "the other" enterprises. Thus, those responsible for purchasing in the automotive supplier industry should critically scrutinize whether these challenges might not apply for their enterprise as well.
Although those responsible in purchasing will identify numerous urgent challenges, they hesitate when it comes to implement the corresponding measures. Ranking first in challenges are the increasing costs and the increasing price pressure of buyers. But some of the instruments for cost reduction are hardly even applied – such as e.g. buyers' cooperations or cost breakdown tools. Handling new technologies and the acceleration of processes are also considered relevant challenges. However, only about half of the surveyed companies provide for the integration of purchasing into their development or production departments as a possibility of coming to terms with these challenges. The same is true for handling the identified fluctuations in currency and raw material prices. Only about one third of the companies are here using a risk management system or natural hedging instruments. The measures implemented in the purchasing departments of the automotive supplier industry will, moreover, primarily concentrate on company-internal instruments with the objective of cost reduction. Although supply chain management presents a major function for handling the identified challenges, there are hardly any cross-company measures applied (Abbildung 2).
The analysis of measures shows that there is a necessity for comprehensive adjustments in the purchasing area of many automotive suppliers requiring major changes in the procurement organization. Despite these deficits, only 19% of the interviewed purchasing executives acknowledge a fundamental need for change in their companies. This discrepancy seems to be the result of insufficient resources available in the purchasing departments of the automotive supplier industry. Thus, about 70% of the buyers stated that they have not enough of a budget and not enough time for the pending challenges.
Purchasing in the automotive supplier industry is facing numerous challenges. However, many purchasing organizations show relevant deficits in terms of coping with these future functions. Accordingly, the most important findings of the study are as follows:
Research Associate (Wissenschaftlicher Mitarbeiter) at the Chair of Logistics Management at the University of St.Gallen (LOG-HSG) and at the Kerkhoff Competence Center of Supply Chain Management (KCC)
Dr. Erik Hofmann
Assistant Professor (Assistenzprofessor) at the Chair of Logistics Management at the University of St.Gallen (LOG-HSG) and Project Manager of the Kerkhoff Competence Center of Supply Chain Management (KCC)