Automotive

Value chain design

Global engineering footprint scenario development for a global automotive supplier

Challenge

The increasing cost pressure and growing importance of embedded systems development within the automotive industry triggered the client to conduct a study to evaluate near-/offshoring scenarios for this part of its business and to determine potential cost savings.

Approach

The approach was to answer the "what", "where" and "how" questions in order to define relevant near-/ offshoring scenarios to our client. The "what" question answered which activities can be transferred and in what sequence this should happen. Hence, the potential was estimated in terms of gross savings in the headquarters. The "where" question answered what are the most attractive locations to transfer the defined activities to. A short list of countries/regions/cities was generated. The "how" question answered in what operating model/set-up should theses activities be transferred to, resulting in preferred business models. Combining these models to valid scenarios and evaluating the time line for implementation and the associated net benefit finalised the approach.

Value

Scenarios were generated and discussed with the top management enabling a transfer of 20-40 per cent of the examined headcount to low cost locations. Hence, reducing cost by approx. EUR 10 million per year.

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