Driving the Future of Automotive Procurement
Disruption is the new normal in the automotive industry. For almost a decade now, the entire industry seems to be engaged in a constant struggle to transform itself. The procurement function plays a very crucial role in this transformation. Maintaining the stability, quality, and commercial performance of these hyper-complex n-tier supply chain networks is the job of the chief procurement officers (CPOs). Are automotive CPOs up to the challenge?
In today’s business environment, automotive CPOs have a lot on their plate:
- How to stay on top of technological developments in new ‘digital’ commodities?
- How to empower and equip teams with the new skills required in a rapidly changing technology and supplier landscape?
- How to create future-proof procurement organizations that incorporate new agile work models as well as streamlined, automated operational processes?
- How to make the most of new cloud-based procurement systems?
- How to establish an effective and fast innovation sourcing process in order to remain on top of the game going forward?
The list goes on.
Scenarios automotive CPOs might face in 2030 and beyond
All considerations in this publication are based on one simple assumption: Future industry developments are hardly ever one-dimensional. Consequently, we have developed four scenarios for the future automotive value chain that highlight development outlooks for OEMs and Tier 1 suppliers. In our analysis of the automotive procurement of the future, we put ourselves in the shoes of an automotive CPO in the year 2030 and beyond. What business environment is the CPO facing? How does the spend development look like? What are the priorities on the CPO agenda?
No-regret moves toward the automotive procurement function of the future
Despite all ambiguity in the future development of the automotive value chain, we believe that there is a set of strategic imperatives to pursue in any case:
- Accelerate supplier portfolio development – without compromising supply chain robustness
- Drive commercial optimization of new 'digital' spend with new business models
- Build the technology-enabled procurement function and maximize potential from process digitalization
- Organizationally split transactional and knowledge-intensive procurement tasks
- Bring your employees in on the journey: train new capabilities, adjust team structures, and align performance management accordingly
‘Accelerated’ procurement transformation paths
All these considerations – both scenario-specific and no-regret moves – must be incorporated into a congruent transformation journey. In the end, however, the only thing that counts is successful implementation. In this publication, we provide the right tools for that.
We invite all readers to reach out to us and start a conversation about their specific procurement transformation toward the next successful decade in the automotive industry.