Sourcing standardisation and efficiency
Embarking on a journey of sourcing standardisation and efficiency, Dayco, global OEM for automotive and industrial manufacturers, sought to overcome the challenges inherent in their existing procurement processes.
Tasked with streamlining supplier communications, standardising bidding procedures, and achieving tangible cost savings, Dayco turned to Market Dojo Sourcing.
To delve into the impact of Market Dojo on Dayco's sourcing operations we spoke with Mike Warnick, Director of Capital Equipment and Indirect Purchasing.
Challenges
Not always 'apples to apples'
Before integrating Market Dojo into their procurement processes, Dayco faced significant challenges in their sourcing operations. Like many organisations, they grappled with disparate tools and manual methods, leading to inefficiencies and inconsistencies.
"We had informal sourcing processes but no single platform so relied on spreadsheets and emails; then someone would have to consolidate everything together."
Comparing the incomparable
He goes on to say, "Coordinating supplier communications was particularly difficult in terms of all vendors getting the same information at the same time. Also, our ability to properly transcribe and summarise responses resulted in difficulties with comparing quotes. Often with equipment RFQs, we'd question whether we were getting the same goods being quoted — it wasn't always an 'apples to apples' comparison."
In a bid to improve the situation, Dayco conducted a thorough Request for Quotation (RFQ) process to evaluate three primary sourcing software providers.
What Our Clients Say
At the end of the day, it's bottom line savings with a side benefit of standardising the process and increasing the visibility of what we're doing.
Solution
Why Market Dojo Sourcing?
Dayco assessed each software provider's offerings, which included online demonstrations and consultations with their global team. Beyond pricing considerations, the decision was driven by factors such as the platform features, usability, and alignment with Dayco's sourcing needs.
"Fairly unanimous, everyone felt most comfortable with Market Dojo and the enterprise licence was extremely competitive."
Supporting first time participants
We asked Mike about the initial transition to Market Dojo Sourcing.
"At first, it felt a bit impersonal but after we had done several events with the same vendors it became just the way we're now doing business."
"Almost every event we've done has been the first time suppliers have participated this way. We've learnt to build-in a 'long runway' at the questionnaire stages so suppliers get used to seeing messages through the system and not in emails. Then, when it comes time for the live auction, the participants are familiar with the system."
Results
'Rinse and repeat' savings
Dayco has run both RFQs and eAuctions for both indirect and direct materials. The savings on indirect materials, such as laptops and desktop computers, have been significant in terms of percentage saved through more rigorous and competitive sourcing processes.
Furthermore, with Market Dojo Sourcing, Dayco is now able to run sourcing events on direct materials on a quarterly basis, rather than annually, to counter market fluctuations. In this high volume sourcing area, Dayco has yielded substantial savings.
"I think on the next round, it'll be quicker only because we had to figure out how to build the advanced lots and have the vendors quote in the manner that we wanted them to. Now that we have it set up, it should be easy to 'rinse and repeat' as they say."
Achieving enterprise-wide adoption
"When we started with Market Dojo, each location was expected to run a certain number of events without putting a savings figure to it. The following year, I was given a savings target for the year and one of the large levers in achieving this target is Market Dojo Sourcing."
He continues, "When we discuss sourcing with other divisions, either direct or indirect, it's common that at some point someone will say, 'Is this something we should run through Market Dojo?' and that's really the intent — that it's not just Procurement but also the individual departments asking if the tender can be run through Market Dojo."
Similarly, with a new facility opening in Mexico, Mike has done the groundwork early with the local buyer to ensure they're familiar with the software by using Market Dojo's sandpit feature.
Key lessons learnt
We asked Mike for any advice and tips he would give to someone who was just starting a digital transformation project in sourcing.
"Start with simple lots — crawl before you walk; walk before you run. And spend a lot of time in the sandpit — your live events will run much smoother when you've tested them out first."
And, a final word on...
What has been the biggest impact to Dayco's sourcing activities?
"At the end of the day, it's bottom line savings with a side benefit of standardising the process and increasing the visibility of what we're doing."
We couldn't have said it better ourselves.