The global purchasing manager of a German automotive supplier placed the interim manager as interim purchasing manager at the main Chinese plant in Shanghai. He replaced the Chinese purchasing director who had been dismissed for corruption.
At the start of the assignment, the supplier's financial situation was tense. In addition, the interim manager was confronted with the fact that the current Chinese general manager had also been dismissed but would remain with the company until the handover. The mandate was made even more challenging by further personnel problems. Some employees in Purchasing had called in sick. The employee who was solely responsible for non-production material (NPM) was on maternity leave.
Successful restructuring in the area of non-production material
In the first step, the interim manager set about reorganizing the processes for non-production material. He determined the needs of the respective NPM managers and developed a workflow from request to entry in the ERP system. He also defined a RASIC with departments and names. This plan was then processed.
In addition, the interim manager made all expenditure subject to his approval. He then set about negotiating new contracts. These included toolmakers, machine suppliers, environmental auditors, waste disposal companies, transport companies, hotels and more.
Successful cost reductions in the logistics chain
In the next step, the interim manager dissolved expensive interim warehouses and contracts with expensive transport companies that had been concluded by the former purchasing director and approved by the general manager. The aim was to use just one international freight forwarder in future instead of many local transport companies. It was important that this company should cover all transportation routes: Land, rail, air and water. To this end, the interim manager initiated a benchmark and negotiated the conditions with two companies.
In the future, middlemen for electronic components were also to be largely avoided. Although they took over the consignment stocks and delivered individual parts quite punctually, the parts were much more expensive than when purchased directly. The interim manager negotiated hard over the high minimum order quantities until a contract was concluded.
Establishing purchasing as an important team member in project management
The interim manager went on to change the company's project management. Purchasing is now involved at an early stage in every development phase. This ensures that production can be carried out cost-effectively with well-chosen suppliers.
On his last day at the company, the interim manager signed two contracts with forwarding companies. He then handed over the department to the new Chinese purchasing manager. One challenge remained: merging all departments into one team, taking into account the KPI specifications and compliance controls "from the very top".
The selection methodology for production and NPM suppliers in China is traditionally based on relationships, not on price, quality or deadlines. The new Chinese purchasing manager will not want to change this either. Therefore, very strict and permanent compliance controlling by Purchasing at HQ or by the new German General Manager in China is essential.
