Companies are constantly looking to lower their purchasing costs and otherwise lean on suppliers to help their bottom line. ZF is doing so in a very public way, having announced on Sept. 13 sweeping changes to its purchasing practices and to its own supply chain. The German Tier 1 plans to significantly reduce the size of its supply base, and to further centralize purchasing. The changes are part of a plan to increase global sales from €15.5 billion today to €20 billion by 2015, a strategy supported by a substantial investment in new production facilities. ZF's suppliers are being asked to contribute cost reductions to help the company realize €500 million in purchasing savings, according to a press release. ZF CEO Dr. Stefan Sommer, who is also in charge of corporate materials management, noted that "sales growth itself is not a value" and that increased profits is the end game.
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ZF's 2015 growth plan puts squeeze on suppliers18-Sep-2012 02:17 GMT
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