Taking the first flight out of Heathrow destined for Frankfurt and the city’s world-renowned Motor Show last month provided an interesting insight into the automotive industry – men in dark grey suits, everywhere. British Airways 0913 was full of them, all eagerly poring over PowerPoints and spreadsheets ahead of a gathering which is seen as one of the most important automotive events of the year.
The event itself was more colourful: journalists, CEOs, models and Maseratis all vied for attention amid the expansive halls of Messe Frankfurt. The OEMs spare no expense on the extravaganza; from ice waterfalls and upside-down A4s in the custom-built Audi wonderland; to Mercedes concept cars and espresso bars.
I was there to visit Brose, a tier-one supplier to the OEMs which itself had constructed a futuristic booth, all back-lit white plastics and spotless demo units. While there, I was ushered into the driver’s seat of a car, where Brose technology gave me a back massage to matching music. It was a far cry from the Toyota Avensis I use to ferry my argumentative offspring around in.
But while the spaceship-style Brose stand was certainly impressive, and the coffee perhaps even more so, some of the stories I was told by CPO Sandro Scharlibbe did more to justify my airfare.
Scharlibbe, who spoke at the Procurement Leaders Forum in Zurich last week, and in so doing shared many of the strategies he uses to unlock Supplier-Enabled Innovation (SEI), comes from a sales background, only switching over to procurement three years ago, where he now enjoys a board-level position. He did so because he recognised the untapped potential of the function, how it could be used as a conduit to innovation rather than a controller of cost.
During my visit to the Show he showed me the prototypes of two products which came into existence thanks to his focus on SEI. First, a door-lock mechanism developed by a potential new partner which boasted a single motor rather than three, a much reduced footprint and weight, while being cheaper and with added wireless functionality as well. The second was a space-age system for restraining loose items in a car boot.
Both these innovations have the potential to bring significant competitive advantage to a company working within a cut throat industry, within which continual improvement and development is the only way to survive. And, to repeat the point, they both came from Brose’s structured, formal SEI process.
Two of the slides Scharlibbe showed in Zurich illustrate the success he is having with the programme as well as anything. The first was a list of ‘projects under construction’, or a pipeline of benefits that have come from its SEI focus – “complex switch disappears, inductive sensor instead”; “30% cost savings, 50% less waste with ABS alloy”; “reliable, real-time GPS sea-freight tracking”, to list just a few. The other was a slide that showed that by 2014, 22 proposals had been put forward for mass production. And Scharlibbe certainly wasn’t slowing down in 2015.
I get asked time and again how CPOs can justify a significant investment in SEI, what metrics can be used to measure success and what, ultimately, the ROI can be. They are difficult questions, with no simple answers.
And it’s why I answer them by referring to stories like Brose.
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