Automotive Part Localization Project Procurement Process Research

As fast development of automotive industry in recent years,more and more foreign companies set up their plants in China,in order to increasing market share;tier 1 enterprises in automotive are looking for new approaches to be competitive.H Company doesn't find out effective approaches to maintain its competitive,current way is to decrease prices to win new business;however,it didn't turn out as expected,meanwhile bring negative impact to the profit.In automotive part industry,material cost shares about 60% of selling price of localization project,so project procurement plays an essential role in localization project management,and directly impacts the success of project.This paper introduces procurement status in automotive part industry and localization project characteristics,H Company business profile and HIPE methodology,then discusses and analyses current status of project procurement and root cause of problems at H Company.It is found out ineffective project procurement management and missing gate control in localization projects are the main constrains and challenges,in addition,copy-paste processes from Germany headquarter is not suitable for localization project's requirements.Based on above facts at H Company,this paper apply for professional methods and tools,e.g.RACI model,make or buy matrix,to create new procurement processes for localization projects,also create supplier management processes in the frame of localization project procurement processes,then advise how to improve project procurement performance and control project gate,shorten procurement lead time and reduce procurement cost,build up team work spirit,finally improve the level of project management in the company.At last,writer advice that the new project procurement management processes,based on local market and adapting HIPE methodology,could be recommended for procurement management practice of automotive part localization projects in the industry.