The Automotive Products Group at Wabash Magnetics 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 Fort Wayne, Indiana, recognised the importance of purchasing to the whole of the company’s operations and instructed ADR International to conduct a baseline review of its current state of purchasing.
Following this, ADR International was instructed to conduct an 18-month purchasing initiative.
The purchasing initiative, led by the Materials Manager under the guidance and support of ADR International, was to change the focus and direction of purchasing with Wabash.
A key element of the initiative was to establish a cross functional team of senior managers to direct change throughout and between all the departments.
This 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 International, that would be used on all production and MRO commodities.
Within six months Wabash achieved 75 per cent of its originally targeted cost savings and an additional 70 per cent of reductions were identified for the next half year. These substantial savings put Wabash on target to achieve 150 per cent 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.
Cost savings Introduction of cross-functional teams Improved sourcing process
Establish cross-functional management team
75% savings achieved within 6 months Improved sourcing processes Sustainable cost improvement