Chrysler purchasing seeks 25% cut in parts prices
Purchasing czar plans to meet with predecessor Stallkamp
By Tom Stundza -- Purchasing, 5/19/2008 9:05:00 AM
Chrysler’s new global sourcing initiative is centered around a 25% reduction in component costs over three years by its key suppliers, according to a presentation by John Campi, executive vice president and chief procurement officer, at a special Town Hall Meeting last week for Original Equipment Suppliers Association members.
In confirming the gist of the presentation, a Chrysler spokesman tells Automotive News that the automaker plans to make some significant changes in its manufacturing and purchasing operations to help suppliers hit the cost-reduction target. He says Chrysler will give suppliers 30 days' notice of its production schedule, rather than the one-week notice typical today; share more parts among nameplates; reduce late engineering changes, which drive up costs, and split savings with suppliers.
Chrysler's program is reminiscent of the SCORE (supplier cost reduction effort) program the company employed from 1989 through 1996. Campi, who
gained the CPO post earlier this year
, plans to meet with former Chrysler purchasing director Tom Stallkamp, who launched SCORE and used 12,000 supplier-submitted proposals to save the automaker an estimated $25 billion. SCORE was scrapped after Chrysler was acquired by Daimler-Benz.
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