Chassis Brakes International: transforming the supply chain
With projected level of car sales increasing year on year, the automotive industry has become an increasingly competitive sphere, with companies seeking to attract buyers after world-class designs, build and services. Since its establishment in 2012, Chassis Brakes International has been working to transform its procurement and supply chain services to become the best in the business, with the aim to expand operations globally.
Manufacturing all forms of car braking systems with an international focus, Chassis Brakes International works in partnership with a large number of Original Equipment Manufacturers (OEMs) in the Asia-Pacific, Americas, India and Europe regions. “There is no OEM on the globe which we are not working with,” explains Cyrille Naux, Purchasing and Supply-Chain Vice President. “We are everywhere where customers need us.” The company’s growth has enabled the establishment of manufacturing facilities in India, China, Thailand, Europe, America and Mexico, with engineering services which have adopted a global presence to cater to service demands.
With a global focus, Naux’s responsibilities incorporate the company’s buying, purchasing, procurement and supply chain operations. With three major roles within procurement and purchasing, Naux has appointed three directors: one for direct sourcing, one for indirect sourcing and one for procurement and digital activities. These individuals work with global category managers who coordinate and develop a global strategy, as well as make key decisions surrounding the company’s global sourcing.
“Each global category manager has a global category buyer located in the regions where we are,” explains Naux. “For example, a global category manager will have a casting buyer located in America, in Asia Pacific, in India and in Europe, and he will be driving all the decisions, set up a strategy and then they will organise a sourcing strategy and various sourcing decisions.”
Since the beginning of 2016, the company has spent considerable time and effort implementing as new global supply chain strategy, that is made up of 28 separate initiatives, according to Chassis Brakes International’ Global Supply Chain Director, Wilfried Hermine.
Chassis Brakes International
“The backbone of the strategy has been a review of the systems across all of our plants,” he comments. “That includes sales and operation planning, master production schedules, execution and control and how we implement those to global standards across all of our sites in order to ensure consistency across the entire supply chain. I have personally spent with one team member at least a week at each of our 11 plants to evaluate current status and define the action plan to close the gap with our best in class model previously defined. This transformation is ongoing and we can already see it benefitting the business every single day.”
With an annual spend of £500mn in direct purchasing and £100mn in indirect purchasing, Chassis Brakes International’s global operations have increased in volume year on year. To provide consistency in service, the company upholds positive relationships with suppliers, ensuring it remains aware of any changes within its procurement and supply chain operations.
Naux explains that the company invites its main suppliers to the Frankfurt Motor Show every two years, where it displays new products and share the company strategy, enabling it to show suppliers how it can continue to create value. “We integrate them from the beginning,” he says. “We have been very clear in saying that Chassis Brakes International will double its turnover and consequently we will also double the spend and its purchasing volumes.”
Going forward the company is looking to reduce the number of suppliers it maintains, but those who remain will have a far greater volume than they have had previously. By creating an open, direct stance surrounding company strategy, suppliers gain direct access to top management to discuss the strategy the company wishes to implement.
While the Chassis Brakes International’s brand name has only been around for a few years, the history of the company goes back to the 1930s, under different banners until 2012 when its activities were sold to KPS Capital Partners, LP. While that history has afforded the company formable experience and expertise in the purchasing space, it also left a legacy of fragmentation, with a number of strategies implemented and then moth-balled as the business changed hands.
“It left us with a fragmented supplier base worldwide,” says Erwan Quemener, Director of Global Sourcing, “and no real rationalisation of the supplier base. So we decided to rationalise this. The number of suppliers managed by my buyers was not sensible, and was actually risky for the business. It is not typically your big supplies that you work with on a weekly or even daily basis that cause the problems, but rather those smaller companies that you don’t work closely with that can affect the whole supply chain in cases where they cannot meet your demands. So in a bid to mitigate risk and implement operational excellence, we decided that our focus would be our main suppliers, thus removing the tier C suppliers.”
Chassis Brakes International parted ways with some 200 vendors; while that may seem hugely significant the companies that were shed represented just 5% of the Group’s total spend, leaving the company’s small supply chain team to work closely alongside the 15% of its suppliers that represent 80% of its spend. The plan is to employ a provider to deal with the myriad of manufacturers that make up the 5% of spend that had previously been so time consuming.
“We are beginning that process this year, and it will save our buyers a lot of time and money,” says Quemener.
Aligned with the company’s growth and expansion, Romain Laclaverie, Global Purchasing Digital Director has been restructuring for the last two years Chassis Brakes’ procurement tools and services. He is behind the set-up and the implementation of the company’s digital purchasing organisation and procurement centres.
Responsible for master data, he explains: “Our people are really dedicated in managing transactional activities, cleaning up and making sure that all data are good and can be analysed by buyers to ensure informed decisions. You cannot make good decisions on a sourcing issue if data are not correctly managed.” This has therefore enabled the company to price accurately and maintain quality service.
The company’s partnerships with major software companies such as SAP and IVALUA have enabled to leverage the latest innovative solutions in terms of data management control and interactions with suppliers. This mind-set allowed the group to master its supplier database by connecting themselves directly to the Supplier Relationship Management tool to exchange essential data, content, legal documentation and spend analysis. “We are also doing contract management and working with the suppliers on this, thanks to the tool,” adds Laclaverie.
In addition to this, Laclaverie is also behind the implementation of a supplier scorecards. This tool, supported by BI solution QlikSense, imports information coming from various supports and sources to calculate a composite rating informing on supplier’s spend performance, quality management, supply chain and financial positions. Laclaverie explains: “Once we have compiled for one supplier all key performance information available into one tool, including last assessments, we are then able to make a rational decision about his future.”
Positive employee mindset
Naux stresses that moving from a regional organisation, to one which is global has been no easy feat. The company has encountered a number of challenges, but he explains that the main challenges surround change management and how employees understand how they can become more involved. He explains: “We spend a lot of time with people, understanding how far they are from target processes and the need to adjust current requirements with a global mindset.” However, he adds confidently that today employees have a good understand on how to remain connected, which is achieved through a number of workshops and training, with continuous improvement at the forefront of all company operations.
Becoming a global organisation has no doubt been a rapid process for Chassis Brakes International, which Naux believes is the result of employee engagement, enabling the company to move towards key targets. “We are a company where agility, value and organisational excellence is really central to what we are doing every day,” he says. Although the company’s global expansion and digital transformation is key, it puts the individual in the middle of all the key decisions. “We are a big company so need to adopt streamlined processes to ensure efficiency, which makes us faster with regards to customer requirements and an easy to work with company. People like working with our Group due to this mindset.”