e-Sourcing project saves brake manufacturer 25%

Specialist brake manufacturer AP Hydraulics has completed an eight-week supplier e-sourcing project across Europe and the Far East culminating in a series of online auctions resulting in a cost saving of 24.7%. Using Vendigital’s e-sourcing software, AP contacted more than 300 potential suppliers of which 20 were selected for the final auctions to bid for parts of AP’s business. “We’re a company that needs to ensure that the products we make are the highest quality,” commented David Nesbitt, md of AP Hydraulics. “They’re safety critical components, costs aren’t the only issue for us. We need suppliers that are able to meet our quality and delivery needs first. “The auctions have proved to us that they are very effective in the first stages of the [e-sourcing] process. They open the gates to potential global suppliers who we wouldn’t normally get the opportunity to find. We don’t have the manpower required to go out and check the credentials of hundreds of suppliers – it wouldn’t be a cost effective method for any business.” Precisely, but as Nesbitt explains, the auction itself is not the end of the process. “What the auctions do is help you with all the initial searching and groundwork, and from here my buyers will check out the best quotes.” Clearly, the e-sourcing process, done properly, is a lot more than just online auctioning and beating your suppliers into submission over costs and delivery. It’s much more about the initial preparation, negotiation, supplier selection and quality appraisals. Most important of all is that e-sourcing itself sits as a set of tools and processes within the overall framework of a sound purchasing strategy. Working closely with Vendigital, AP held purchasing workshops to evaluate ‘make versus buy’ strategies. With some 2500 employees, operating in locations across Europe and the USA, and group sales exceeding £250 million, AP Hydraulics has been manufacturing brakes, clutches and hydraulics systems for the past 80 years.