Indirect – Automotive/Truck Valvetrain Component Supplier

Dan B.

President

Valvetrain Components Manufacturer

Valvetrain component supplier to automotive and truck industries achieved 5% annual savings on their $19M annual indirect spend while improving service levels (addressing MRO, freight, and packaging)

Why did you decide to focus on indirect spend for cost savings?

Each plant was really decentralized and there wasn’t a lot of emphasis on cost reductions.  There was a lot of concerns that we were just going through the motions and not really seeing the opportunities for cost reductions.

Were you able to achieve savings on indirect without outside help?

We did challenge each one of our facilities to really look at cost reductions and how can we reduce costs in their facilities  They really struggled, it was very hard to gather the data.  We knew we had gaps with our skill levels and knowledge and systems and data.

How you were you able to justify the budget for bringing in outside help?

It really wasn’t a lot of out-of-pocket costs. It was like, why wouldn’t we give this a shot? You guys have more knowledge and experience and expertise than we do. And if we can save by doing it, why wouldn’t we do it?

How would you describe our experience with APD on this project?

It’s gone excellent, you guys are good champions. You try to drive that things stay on course and things move, which is helpful because if you don’t have that leader and champion, you do peter out and it gets slow and you lose the momentum.

Did you get a good financial return from the project?

A lot of good value, the ROI is off the chart. I mean, it’s just really substantial, and it comes right to our bottom line.

Would you recommend other manufacturers use APD to drive savings on their indirect spend?

A hundred percent I would recommend. I appreciate all your guys’ effort. I love the savings and it’s important to us.