Situation
The aim of filling the position of Senior Commercial Consultant at the automotive supplier was to support the department manager in producing new products for electromobility sustainably and competitively and selling them to customers. Due to the high level of competition from Asia, the products had to be realized both qualitatively and economically and with very short lead times.
Challenges/scheduling
Sales to date have been made exclusively through Power Point presentations to customers and by calculating the costs of comparable products based on combustion engine technology.
In order to be competitive in terms of price and to be able to meet the short lead times of customers, synergy potential between the new products that are to be installed in electric vehicles in the future and current series products that are currently being installed in combustion vehicles had to be identified.
The first challenge was to identify existing production facilities, tools and suppliers that could be used for both products. With a view to capacity management, employee utilization and manufacturing costs at the relevant production sites.
The second challenge was that the synergy effects meant that components, tools and production facilities had to be renegotiated with suppliers, which led to very short lead times for all parties involved, as there were deviations in capacities.
The third challenge was to identify production locations that a) can cope with a short lead time b) are economically interesting c) the customer agrees to the location as a supplier.
Sustainable result
Over the course of 12 months, I used lean and change management tools to analyze and evaluate the following topics in order to be able to place competitive products in the electromobility sector:
- Cost optimization of individual components in the team using target costing, functional cost analysis and make or buy calculations.
- Use synergy effects from material and tool procurement and realize new investments for a broad product range.
- Identification of production sites based on evaluation of KPIs such as production utilization (OEE), employee utilization (SOM), manufacturing cost analyses (ROS), internal rate of return (IRR) calculations and profitability calculations (ROSE).
- Ensuring competitiveness by means of merger & acquisition (M&A) measures for various product variants.
Consolidation of all results in a business plan including forecast creation with synergy effects from individual sub-areas for the management decision “Go/Exit”.
Conclusion
Based on the profitability calculations and taking into account customer specifications in terms of price, time and purchase quantities, we initially started production of the new products for electromobility in China (market: Asia, USA), expanded it in the Czech Republic (market: Europe) and set up a location in Germany as a competence center, taking re-use into account. We have identified Mexico as a potential location should higher quantities be requested from the USA in the future. As a result, we were able to generate an order intake of EUR 550 million in one year, meet customer schedules and reduce production costs to such an extent that we remain competitive in the long term.
