Project Lead Make or Buy Savings

Project facts:
Company: Bosch Automotive Steering GmbH (Automotive Tier 1 supplier)
Company Size: ~15k employees
Domain: Manufacturing relocation
Team composition: Five teams, each with 1x Purchasing, 1x Manufacturing, 1x Quality, 1x Logistics (+ support from other functions when needed)
Method of collaboration: Hybrid Kanban and Waterfall
Key learning:
Honest communication is key!
Main challenges:
Complexity of leading five teams attempting to relocate manufacturing of five unique components.
Getting buy-in of the organization as well as workers union while under intense management attention.
Main successes:
Realization of 7 figure cost savings.

The Story:
In summer of 2017, I was tasked with leading a project called “Make or Buy Savings”. The goal of the project was to analyze 5 different components that were, at that time, manufactured inhouse. Within 18 months we were to verify prior cost saving calculations as a result of relocation to suppliers or other plants, evaluate different options for the relocations, drive a decision, and – in case the decision was made to relocate – execute the relocation of the components.

The most challenging part about the project was certainly the complexity and the scope. Five different components were being analyzed, each with their own unique technical challenges in the manufacturing process. For each component, somewhere between ten and thirty different customer specific adaptions existed. For each and every one of these, we had to find a solution, align it with workers council, customers and suppliers, plan and conduct testing where necessary, and actually execute the relocation.

Each component was handled by a dedicated team, chiefly consisting of purchasing, quality, logistics and manufacturing competencies. When needed, engineering, sales, and controlling were involved as well. Unfortunately, none of the team members were 100% dedicated to the project. Instead, they were all balancing it along with their regular day to day tasks.

This was probably one of the reasons why the project got off to a fairly slow start. Almost none of the team members were particularly happy when I first approached them about being part of the team. Naturally, this sentiment was amplified for the colleagues in manufacturing by the fact that our goal was to relocate their day-to-day business. Nobody was going to get fired but jobs and responsibilities would change in case of achieving the project´s goal.

My solution to the initial adversarial environment was being empathetic in regards to the situation but also very honest and transparent in communicating the facts. This was especially helpful in dealing with the workers council, where I presented the calculations and gave regular status updates for the different components.

Initially, I set up the project using an agile approach closely resembling scrum but after a discovery phase, it quickly became apparent that for most components a more classic project management approach was more suitable. We kept some of the elements, mainly visualizing current work packages on a board and enabling frequent feedback loops using by-weekly reviews with the main stakeholders. Overall, however, it was more about ensuring that a plan with mostly clear steps is executed as opposed to dealing with extreme uncertainty.

The project ended after one and a half years with us successfully relocating two components, in one case an entire production line, realizing 7 figure cost savings. For two other components the decision was made to relocate them and we handed the relocation plan over to the line organization for execution, later leading to similar cost savings. The relocation of the final component was stopped due to technical issues.