Detroit Diesel

The objective set for the team was to come up with a plan to reduce external procurement costs by $100M per year.

The plan had to allow for the fundamental reengineering of external procurement so that the financial target could be met in a way that improved overall business results (quality, product development time, etc.)

Part of the challenge in changing things in a radical way was the traditional manufacturing culture that came from having been part of General Motors until a few years previously.

The team contained individuals with a wide range of backgrounds. These included Procurement, Product Development, Finance, Manufacturing, Customer Service, etc.

They identified the fundamental issues with major impacts on the business in addition to the cost impacts.

The team developed a reengineering plan to change the approach to product design, manufacturing and lifetime support. It included a significant component of product line rationalization. The final plan took a comprehensive approach to not only reducing costs but also improving the way the business operated.