Effective procurement strategies are essential for success in the automotive industry, as automotive manufacturers must be able to ensure they procure components that are both affordable and high-quality. To improve the results of the procurement processes within your automotive manufacturing company, here are four highly effective strategies that you can implement.

1) Leverage the Benefits of Technology

Making use of software designed to improve the efficiency and organization of your supply chain is a great way to streamline your procurement process. Rather than building your supply chain around the technology that you have available, though, structure your technology around your existing supply chain by identifying areas that need improvement and highlighting technological solutions that are able to solve the problem. By leveraging supply chain software solutions in this manner, you can remedy organizational gaps in your supply chain and ensure that your entire procurement process is much smoother and more efficient.

2) Focus on Total Cost of Ownership

Total cost of ownership (TCO) is a much more meaningful metric for procurement professionals in the automotive industry than the purchase price alone. In fact, the upfront purchase price of most products and services accounts for just 25%-40% of the total cost of ownership. TCO takes into account factors such as, maintenance, shipping costs, environmental costs, and more to provide you with a more complete picture of how much a product or service costs. This enables you to better analyze the bids from suppliers that you are considering your partnership with.

3) Minimize Risk With Policies and Controls

When developing your procurement strategy, minimizing risk should be one of your biggest concerns. Few things are worse than having your entire automotive manufacturing operation grind to halt due to a disruption in your supply chain. While working with experienced and trusted suppliers is the best way by far to minimize this risk, another effective risk mitigation strategy is to put in place policies and controls that enable you to identify potential bottlenecks in your supply chain ahead of time and quickly pivot to a new supplier in the event that you are faced with a serious disruption.

4) Establish Relationships with Trust Suppliers

As mentioned above, working with trusted suppliers is the best way to minimize the risk of a supply chain disruption. However, the benefits of working with trusted suppliers do not end there. Forming mutually beneficial relationships with suppliers that you trust enables you to ensure that the components you are procuring are of the highest possible quality and provides you with an ally that can help you overcome procurement challenges. In the end, most automotive manufacturers are only as successful as the suppliers that they partner with.

How Hartford Technologies can Help With Your Procurement Strategy

At Hartford Technologies, we are proud to partner with procurement professionals in the automotive industry to supply them with high-quality components in a timely manner. We understand the importance of maintaining an effective and efficient supply chain and work with all of our customers to ensure that their needs are met each and every time. If you would like to learn more about the benefits that Hartford Technologies is able to offer procurement professionals in the automotive industry, we invite you to contact us today.