During an economic recession in 2007-2008, a major automotive company needed to consolidate its network of 250 stamping suppliers in North America to reduce costs and supply risk. The company analyzed its suppliers' operations, finances, contracts, and production capabilities. It identified 131 suppliers that could take on additional business from exiting suppliers and transitioned programs between suppliers. This reduced the supply base by 48% without any reported production interruptions. The consolidation also allowed the company and remaining suppliers to reduce costs by increasing plant utilization rates.

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Case Study | Special Project Execution
North American Supply Chain Optimization | Stampings
Abstract
During the 2007-2008 recession, a global automotive OEM needed to consolidate suppliers to minimize costs
and supply risk associated with their North American stamping supply chain commodity.
Challenge
• Demand levels were driving reductions in plant asset utilization instigating financial capriciousness in the
supply base in North America.
• OEM had 250 stamping suppliers to support its North American vehicle production.
• Strategic category sourcing analytics, total contract lifecycle analysis and operational and financial assessment
scorecards for risk profiling were all utilized to select suppliers that offered the optimal and achievable total
value stream package.
Execution
• Developed supplier database including all OEM vehicle programs and assembly facilities, contract lifecycles
and supply locations focusing on best landed cost for all value streams.
• Supplier operational and financial performance evaluation scorecards were executed for risk profiling.
• Analyzed OEM part production processes, equipment and tooling at exit suppliers to create bid packages.
• Analyzed grow supplier production assets to determine capacity and performance for new business.
• Utilized bid package data for expedited resourcing to proactively transition the contracts into grow suppliers.
Result
The stamping supplier part programs were transitioned from exit suppliers increasing the spend with grow
suppliers. The supply base was reduced to 131 suppliers or a 48% reduction without any reported assembly
plant interruptions. Additionally, the OEM purchasing and supply chain commodity had the ability to reduce
piece cost as the grow suppliers increased plant asset utilization.