GlobalSupplier - Daimler

Business
Simon
Egeler
Guideman
Mbinyashe
Cost Planning teams
visiting suppliers
Several major suppliers have been
visited and 17 continuous
improvement workshops have been
hosted by the Cost Planning
Specialists from Business
Excellence Department within the
Procurement and Export Division of
DCSA in East London.
Cost planning specialists in the
cross-functional Business Excellence
Department, Henrik Fricke and Simon
Egeler, as well as supplier management
specialist Guideman Mbinyashe,
outlined the programme which is
geared to focus on cost drivers and
reducing costs by optimising processes.
Thirteen workshops, which usually last
between two to five days, have been
held with W203 suppliers Venture, JCI,
Behr Climate Control and R.G. Brose
among others as well as with Colt
suppliers like August Laepple.
“We are trying to identify the areas
for improvement together with our
suppliers,” Fricke said.
Egeler said the idea was to implement
open-book cost calculations based on
the DCAG methodology so that SA
becomes globally aligned. This will
enable an easy interface with the
German cost planning division. The
goal is to achieve a common understanding
and get more people to have a
general idea of the whole process.
“The message to suppliers is that
the success of the cost planning
objectives will be determined by the
level of co-operation we get from them,”
Mbinyashe said.
The challenge ahead is to reduce
the continuously increasing cost gap
between DCAG and DCSA.
“The rand is a concern and that means
we have to localise more and suppliers
will need to implement more product
diversification. We have lower volumes
compared to Europe and Japan, with a
higher inflation rate. In addition to this
is the task of aligning some suppliers'
mindset with DCSA. They talk about
prices and we talk about costs,” Fricke
said.
Finding a win-win solution. The main
challenge and means of addressing
these problems is through open book
cost calculation trying to get transparency
in order to compare SA/German
benchmark costs and to see where
areas of improvement can be made.
Egeler said the workshops focus on
open book calculations, a common
calculation base and bottom-up calculations
to set up a target price as well
as looking at the production line and
making action plans.
He said the common calculation base
helps in Vendor Price Negotiations
(VPN) as the detailed breakdown
enables proper negotiations to take
place.
“We also train DCSA buyers in our
calculation methods and have created
a training manual for them to assist
suppliers in terms of costing,” Egeler
Henrik
Fricke
21
said.
Fricke said this was in order to have
a common base and to ensure likewise
that full understanding is achieved.
Their main task is to provide support
services to the buyers.
He further said that DCSA gets support
from the German cost planning division
as they are the Part experts.
Mbinyashe said they are currently busy
collecting information on general cost
drivers from suppliers.
“We need to obtain detailed information
from suppliers. Getting the information
in advance helps when preparing for
VPNs. This information is highly confidential
and will only be used by cost
planners.” Mbinyashe emphasized.
Egeler said the exercise was not about
cutting profit, but rather helping the
suppliers and in the process achieve a
win-win situation.
“We assist the suppliers in identifying
the deficiencies and in how to save
costs in their own plants and this
enables them to achieve high levels
of competitiveness more especially if
they want to become global suppliers,”
Egeler said.
Fricke said their role is to help and
recommend solutions, and suppliers
should try to see this assistance as an
opportunity rather than a threat.
Ten suppliers will be visited in 2002.