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Company case by INVERTO, a BCG Company
INVERTO Case: VacuLuxe Innovations' Supply Chain Makeover
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The client, VacuLuxe Innovations, is a manufacturer for vacuum pumps, e.g. rotary vane pumps, cryogenic pumps located in Germany. The company has grown from a start-up to a major corporation over the last 50 years. However, after benchmarking the economics of their business, the client discovered that their direct spend (i.e., COGS supplier spend) represented a higher percentage of their revenue than their closest competitors.
The client's top management has engaged the SCM and procurement specialized consultancy INVERTO to advise the company in this critical situation.
An initial meeting with the CPO of VacuLuxe Innovations will be conducted tomorrow. VacuLuxe Innovations aims to discuss optimization potentials in the current collaboration with suppliers as well as levers to improve the supply chain resilience & carbon footprint. Unfortunately, VacuLuxe Innovations has only submitted the following high level data for their direct spend yet.
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Part 1
For the initial meeting with the CPO your Project Manager asks you to evaluate savings potentials, define three focus categories for the upcoming project and summarize your findings to be presented to the CPO.
Part 2
The CPO is enthusiastic about the initial analysis and the potential savings. Particularly in the steel category, the CPO is aware that the company has been struggling for some time. Due to historical structures and internal resistance to change, the supplier portfolio within the category has remained virtually unchanged for the past 15 years. With the management attention the project holds however the supplier portfolio and potential opportunities shall be evaluated.
Your project manager asks you to identify, assess in terms of impact and probability, and classify Supply Chain Risk dimensions and associated examples that should be considered when building a strategic supplier portfolio. You are also asked to provide an overview of mitigating actions for the identified risks.
Part 3
Following a pre-selection of suppliers based on the Supply Chain Risk assessment condcuted earlier, the CPO pushed to conduct a RfQ between the incumbent suppliers which delivered promising results.
In preparation for the Steering Committee meeting with the CPO the following day, you are asked to define the relative importance of each criteria category and evaluate the results of the RfQ to formulate a target supplier portfolio.
7.3k
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Intermediate
Difficulty
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