Background:

Wabash Magnetics' Automotive Products Group manufactures, designs and assembles electronic sensors and fuel injector solenoids for automotive and large engine applications.

The Vice President of Operations for Wabash, based in Ft.Wayne, Indiana, recognized the importance of purchasing to the whole of Wabash's operations and instructed ADR to conduct a PRISM® baseline review of its current state of purchasing. Following the PRISM baseline, ADR was instructed to conduct an 18-month Purchasing Initiative.

Aims:

Led by the Materials Manager under the guidance and support of ADR, the aim of the Purchasing Initiative, was to change the focus and direction of purchasing with Wabash.

Project:

A key element of the Purchasing Initiative was to establish a cross-functional team of senior managers to direct change throughout and between all the departments. sThis would ensure the development of a new balance and differentiation between the transactional and the strategic approaches to the supply base.

The initiative also included establishing source plans, developed with ADR, that would be used on all production and MRO commodities.

Results:

Within six months Wabash achieved 75% of its originally targeted cost savings and an additional 70% of reductions were identified for the next half year. These substantial savings put Wabash on target to achieve 150% of its original goal in the first 12 months of the initiative.

"Benefits brought by the introduction of cross-functional teams ranged from significant cost reduction and cost containment on current products and sources, to an improved sourcing process with shortened lead-times and lower initial cost in the area of new product introduction.

"The use of source plans now ensures that Wabash has a road map to ensure continual cost improvement for years to come."

(Reproduced with the kind permission of the VP of Operations for Wabash Magnetics' Automotive Products Group).