Case Study: Global Auto Parts Inc. Achieves 15% Savings with SAP Ariba and EXP B2B

Introduction

Global Auto Parts Inc. (GAPI), a prominent mid-sized manufacturer specializing in automotive components with key production facilities across North America and Asia, faced significant hurdles in managing its complex global supply chain. With an annual addressable spend exceeding $500 million spread across diverse categories like raw materials, MRO (Maintenance, Repair, and Operations), and indirect services, GAPI recognized the urgent need to modernize its procurement operations to maintain competitiveness and drive profitability in the demanding automotive sector.

The Challenge: Decentralization and Lack of Visibility

GAPI's procurement landscape was characterized by fragmentation and inefficiency. Key challenges included:

• Decentralized Sourcing: Procurement activities were handled independently by regional teams, leading to inconsistent strategies, missed opportunities for volume aggregation, and a lack of standardized processes across the organization.
• Limited Spend Visibility: Without a centralized system, GAPI struggled to gain a comprehensive view of its global spend. This lack of visibility hampered strategic decision-making, made it difficult to identify savings opportunities, and hindered effective budget management.
• Inefficient Contract Management: Contracts were often stored in disparate locations (local drives, filing cabinets), making tracking renewals, obligations, and compliance a cumbersome and error-prone task. This exposed GAPI to significant compliance risks and potential value leakage.
• Lengthy Sourcing Cycles: Manual processes for running sourcing events (RFIs, RFPs) and negotiating contracts resulted in protracted cycle times, delaying critical procurement decisions and impacting time-to-market for new components.
• Missed Savings Opportunities: The inability to leverage global purchasing power and negotiate effectively due to fragmented data and processes meant GAPI was frequently missing out on potential volume discounts and favorable contract terms.

Recognizing that these inefficiencies were impacting their bottom line and agility, GAPI's leadership sought a transformative solution. They needed a partner with deep expertise in both procurement best practices and SAP Ariba technology to overhaul their sourcing and contract management processes.

The Solution: Strategic Implementation of SAP Ariba Sourcing and Contracts

After a thorough evaluation process, GAPI selected EXP B2B as their strategic implementation partner. EXP B2B proposed a comprehensive solution centered around the implementation of SAP Ariba Sourcing and SAP Ariba Contracts, designed to address GAPI's specific challenges and deliver tangible results.

The core components of the solution included:

1. SAP Ariba Sourcing Implementation: Deploying the module to standardize and automate the process for conducting sourcing events (RFIs, RFPs, Auctions). This involved configuring templates, establishing workflows for approvals, and training users on best practices for strategic sourcing.
2. SAP Ariba Contracts Implementation: Implementing the module to create a single, centralized repository for all supplier contracts. This included configuring contract workspaces, establishing clause libraries, setting up automated alerts for renewals and expirations, and defining workflows for contract authoring and approval.
3. Integration with SAP ERP: Ensuring seamless integration between SAP Ariba and GAPI's existing SAP ERP system to facilitate the flow of information, such as converting awarded sourcing events into purchase orders or outline agreements within the ERP.
4. Strategic Category Management Support: EXP B2B provided guidance on applying strategic sourcing methodologies to key spend categories, helping GAPI prioritize sourcing events and develop effective negotiation strategies.
5. Supplier Enablement: Developing and executing a plan to onboard key suppliers onto the Ariba Network to facilitate electronic communication and participation in sourcing events.

The Implementation Journey: A Collaborative Approach

EXP B2B employed a proven, phased methodology over a six-month period, working closely with GAPI's procurement, IT, and legal teams:

• Phase 1: Discovery and Design (Months 1-2): EXP B2B conducted detailed workshops to understand GAPI's existing processes, pain points, and future-state requirements. This phase resulted in a comprehensive solution design document and a detailed project plan.
• Phase 2: Configuration and Integration (Months 2-4): EXP B2B's technical consultants configured the SAP Ariba Sourcing and Contracts modules according to the agreed design. Integration points with the SAP ERP system were developed and tested rigorously.
• Phase 3: Testing and Training (Month 5): User Acceptance Testing (UAT) was conducted with key stakeholders from GAPI to ensure the system met business requirements. EXP B2B developed tailored training materials and delivered comprehensive training sessions to procurement professionals and contract managers across different regions.
• Phase 4: Go-Live and Support (Month 6): The SAP Ariba solution was successfully launched. EXP B2B provided intensive post-go-live support (hypercare) to address any immediate issues, ensure smooth user adoption, and manage the initial wave of supplier onboarding.

Throughout the project, EXP B2B emphasized change management, ensuring clear communication and stakeholder buy-in, which was critical for the successful adoption of the new processes and technology across GAPI's global operations.

The Results: Measurable Savings and Enhanced Efficiency

The implementation of SAP Ariba Sourcing and Contracts, guided by EXP B2B's expertise, delivered significant and measurable benefits for Global Auto Parts Inc. within the first year:

• 15% Reduction in Addressable Spend: Through strategically executed sourcing events for key raw material and MRO categories using SAP Ariba Sourcing, combined with improved negotiation leverage from better spend visibility, GAPI achieved a remarkable 15% cost reduction on over $300 million of analyzed spend.
• 30% Reduction in Sourcing Cycle Time: Automation and standardized workflows within SAP Ariba Sourcing dramatically shortened the time required to run sourcing events, enabling faster decision-making and quicker supplier selection.
• 95% Contract Compliance: The central repository and automated tracking features of SAP Ariba Contracts significantly improved adherence to negotiated terms and reduced off-contract spending.
• Centralized Spend Visibility: GAPI gained unprecedented visibility into its $500 million annual addressable spend, enabling more informed strategic sourcing decisions and better budget forecasting.
• Improved Operational Efficiency: Procurement and legal teams reported significant time savings due to streamlined processes, automated workflows, and easy access to contract information.
• Enhanced Supplier Collaboration: Utilizing the Ariba Network facilitated more efficient communication and collaboration with key suppliers during sourcing events.

Conclusion

By partnering with EXP B2B to implement SAP Ariba Sourcing and Contracts, Global Auto Parts Inc. successfully transformed its fragmented and inefficient procurement operations into a strategic, data-driven function. The project not only delivered substantial cost savings but also enhanced operational efficiency, improved compliance, and provided the visibility needed for continuous improvement. GAPI is now better positioned to navigate the complexities of the global automotive market and drive sustainable growth.