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ThE bEst procUrErs wiN!

On average approximately 45% of total costs in the automotive industry consist of material costs. With raw materials becoming more expensive worldwide this ratio is on the rise. In addition to this, the prices on the international market are partly uctuating to an extreme. Procurement is playing an increasingly important role in a companys supply chain. Therefore initiatives on cost reductions for materials should permanently be at the top of the management agenda. Longterm success is reliant on the creation of a strategic negotiating position as well as continual efforts to reduce costs. This is far more than imposing mundane price pressure or outsmarting suppliers: The aim here is to secure and develop long-term partnerships. Purchasers today have to always be able to estimate whether current prices are still in line with market conditions or whether they allow room to manoeuvre in negotiations. They have to follow price developments with the materials to be procured as well as the parts already purchased. They further have to compare prices not only sporadically or before an annual meeting. The real question is whether traditional instruments such as annual talks with suppliers or LTAs

Companies exist by selling products. However, economic success is also largely dependent on procurement whereas optimal procurement means far more than merely negotiating prices.
are still state-of-the-art nowadays and if they are in line with the instable and dynamic market. What is really necessary is continual supply-chain relations management. All these developments add value to the procurement department. They are far more than an order ofce and they require modern tools so that they can make procurement one of the decisive factors contributing to the success of a company. The modern purchaser acts as procurement market-, costs- and processes manager; he further also inuences pro duct development, participates in the creation of conceptual solutions and works closely with project teams. However, in commercial practice it is exactly these tasks that are neglected. Daily business allows little time to develop a strategy to potentially save costs with materials or even drive a strategic nego tiating position. An effective approach is to call in external specialists such as those from the Schnitzer Group. Daily business can go on and, at the same time, the team from the procurement department can, with the skills and additional capacity provided by external professionals, create and realise suitable measures. As a result procurement goals are attained considerably faster and more efciently.

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Dear Reader,

Raw materials are becoming more expensive, the costs of materials and vendor parts are on the rise. This is why it is even more important that companies buy efciently. That doesnt necessarily mean pushing prices simply swapping them for new ones. The procurement markets are too intricate, the dependencies too extensive. Cost reductions with complex products require a detailed knowledge of the market, of the technology, of the pro ducts and of production itself. This is where we can offer support by, for example, studying cost proposals with the procurement department. We focus on technical aspects and the quality of the parts to ascertain which offers are the best ones. We can do this by implementing methods and using tools for the strategic monitoring of material costs as well as identifying saving potential. We have become valued procurement partners for companies from various industries around the world. It is therefore no surprise that our support in technical procurement is at present one of our most sought after services. Best regards
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down in supplier negotiations or just

SUpplY-ChaiN MaNagEMENt iN SoUth AMErica

a while at least. This does not only apply to the situation on the streets where road users move around rather daringly through rush hour in comparison to Europe. If one is aware of the situation and is well-prepared at the start of the project, nothing stands in the way of a project concluding successfully. Neither does it stand in the way of a Caipirinha after work with your customers colleagues. Tobschirbel is certain that in the coming years, South America will prove to be a region with great potential in all supplier hierarchies. In particular in the small car segment an attractive market with approx. 400 million people will open up for the automobile industry within the next decade. Brazil and Argentina are however, by no means low-cost countries and will not be developing in this way. To some extent products for South America are already being pro duced in Europe and despite high freight costs of overseas transport are still more reasonably-priced.

The task was clear for the Head of Technical Procurement, Andreas Tobschirbel: He was to locate suppliers for approx. 60 components in Brazil for three automobile projects. In addition he had to source 30 checking xtures as well as appoint 25 production plants including equipment. He further had to allocate the components and, after comparing offerings and negotiating from a pool of existing suppliers, went on to nominate and contract the most suitable ones. On site, Tobschirbel then ascertained that language barriers were signicant if one did not speak Portuguese or Spanish. This was compounded by the fact that it was not easy to work when the mobile network (frequently) or the internet connection (even more frequently) did not work. This combined with a leaky ceiling in the ofce, created working conditions which sometimes made the simplest task comparable to climbing Mount Everest. And according to Tobschirbels experience, one had to be willing to let go of some German traits in exchange for South American improvisation talent, for

Your Peter Schnitzer

AppoUt tiME...
Schnitzer has launched its own app: The Calendar weeks calculator provides support in the timing of a project. Do you only know when the project is going to begin and end? The App quickly calculates the duration of a project. If you only have information on the duration of the project, the App can be used to identify the start and end of the project. The calculator is available free of charge in the Apple App Store and can be used on an iPhone, iPad and iPod touch.
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IN opEratioN worlDwiDE
A)  Controlling of tools and monitoring of tool-makers in China and in India B)  Visit to the manufacturers in India and Russia. Management of logistics and approval process for a component which is to be implemented here C)  Talks with manufacturer in France who is designated to take over developmental work ... D)  Meeting with the fourth manufacturer in Romania where work is to be coordi nated between Tier-1 and OEM ... E)  On-site appointment with Tier-1 with headquarters in Germany; he will take over the coordination of the project with the development and testing team F)  Checking of progress development is carried out at the Tier-1s second location in Germany G)  Telephone conference with another subsidiary of the Tier-1 in France who is responsible for the monitoring of project costs H)  Testing of components and the initiation of improvements together with the Tier-1 in the Czech Republic

Which manager does not look for effective and fast ways to increase the prot of the company long-term? With the promotion program go-Inno by the Deutsche Material efzienzagentur (demea) (German materials efciency agency), the Schnitzer Group is offering a gradual approach to analyse and realise measures. The services are divided into three consecutive steps: Self-check, Analysis of potential/In-depth consulting, Realisation. The promotion is directed at SMEs with up to 250 employees with a maximum turnover of 50 million. The analysis of potential and in-depth consultation is sponsored by the demea with a contribution of 50% towards the costs.


With Leo Wang a further Schnitzer employee successfully completed the qualication to become a VDA 6.3 supplier auditor, in Shanghai this July. By qualifying within the summer of this year, Leo Wang will be able to carry out VDA 6.3 audits indenitely; whereas due to latest changes, the qualications from now on are limited to an operational period of three years.

What global project management means in practice is best illustrated with a real example. In order to secure the date for the simultaneous series production in different regions, a Tier-1 company contracted the Schnitzer Group to coordinate various activities in the regions themselves. Here is an excerpt from the diary of one of the Schnitzer team: I)  Monitoring and corrections in the creation of the production line are carried out at the Tier-1 subsidiary in India. Tasks such as these do not only demand expert knowledge from the global managers but also a willingness to be open to foreign cultures and different ways of working. It also demands a sense of adventure and a desire to embark on pioneering work. The Schnitzer motto Our dedication to your project worldwide takes on a completely new dimension with this kind of work.


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Growth iN thE NoN-aUtoMotiVE iNDUstrY

The Schnitzer Group is further expanding its involvement in the non-automotive industry. This is because the demand for systemic project management is growing continually. With supplier controlling the Consulting and Supply Chain Management Department, for example, currently supports an internationally active Tier-1 supplier for complex interior and exterior systems within the aviation industry. In charge of pre-suppliers for electrical systems and control units, Schnitzers main tasks include ensuring that contractual obligations have been fullled, monitoring the state of progress as well as the nancial supervision on services being invoiced. Schnitzer also took over the transfer of an incoming goods inspection station for the pre- suppliers as well as the implementation of complementary and standardised processes. The experts were also responsible for securing the supply for production and the set-up of purchasing organisation in a new location for the manufacturer of Energy and Automation Technology for a utility and industrial company. The implementation of a new manufacturing technology for the casing of a laboratory device was being discussed for a world market leader in the area of Healthcare. The manufacturing was undertaken using a plastic injection mould ing process developed by the Schnitzer Group. Here a signicantly improved surface quality is achieved with less process ing time.

Schnitzer Anlauf- und Projektmanagement GmbH Paradiesstrasse 4 88239 Wangen im Allgu Germany Phone +49 7522 7079 69-0 Fax +49 7522 7079 69-18 Schnitzer International Swiss GmbH c/o OBT AG Hardturmstrasse 120 8005 Zurich, Switzerland Phone +41 43 818-2536 Fax +41 43 818-2537
Editorial team and design: Sympra GmbH (GPRA)


EVEN highEr, EVEN fUrthEr

By mountain bike though unknown terrain, with a trekking rucksack through Thailand or off to purchasing negotiations in Brazil Andreas Tobschirbel enjoys a spirit of adventure and new challenges. The charismatic procurement expert has, since his start at the company in 2010, already own over 115,000 ight kilometres and has travelled to India, Brazil and Argentina as well as around Europe. Working with people from various cultures contributes to making his job particularly exciting. He gathered professional experience by working as a technical procurer and head of materials management in the supplier industry

Schnitzer Consulting Shanghai Co. Ltd. c/o German Centre for Industry and Trade Shanghai 88 Keyuan Road Tower 2 Ofce 626 Zhangjiang High-Tech Park Pudong 201203 Shanghai, China Phone +86 21 2898-6184 Fax +86 21 2898-6252

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