Aiming at the suppliers for volume advantages

2007-10-17 Press release

Just 10-20 years ago it was normal for an automotive manufacturer to have 50-60 suppliers of fasteners. Now factories have only ONE supplier, which in turn is responsible for 50-60 other suppliers… This is the context in which Finnveden Bulten’s role should be seen.

THE AIM OF GLOBAL PURCHASING is to reduce the number of suppliers in order to create volume advantages for Finnveden, which in turn leads to lower prices and costs.
“We’ve introduced a supplier strategy where we’ve identified preferred suppliers, i.e. selected companies with stability who we prefer to work with,” says Torbjörn Hjerpe.
The database of suppliers originally contained 150 companies. After closer evaluation that number was whittled down to 60. Ten factors, such as financial status, quality, logistics, product development and ownership, helped determine which were the right business partners.
“The other 90 suppliers are gradually being phased out, either by shifting production of an item to one of our preferred suppliers, or by removing the item altogether,” Torbjörn Hjerpe explains.
A REDUCTION in the number of suppliers means larger Finnveden orders for the ones remaining. Even so, Finnveden is a company that sets rigorous demands. The automotive industry’s tough conditions are reflected directly on Finnveden’s operation, and thereby also on its subcontractors.
“ISO 9001 and ISO 14001 certification are minimum requirements for our suppliers,” says Torbjörn Hjerpe.
FINNVEDEN BULTEN PRODUCES exclusively for the automotive industry. Customers in this sector have high expectations of smoothly functioning logistics and continuous improvement, to ensure even cheaper products while maintaining quality.
“This is why we must also place tough demands on our own suppliers, partly to be able to reduce costs,” says Torbjörn Hjerpe.
He stresses that the new supplier strategy is a dynamic document.
“We are monitoring the market and looking at potential new suppliers. If they fulfil the requirements they will be added to the list. It’s not a static document.”