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Contributing to Business Innovation and Value Enhancement for Diverse Clients

Looxent provides clients with practical and implementable solutions, driving fundamental change that leads to significant improvements in business value. Through this approach, Looxent positions itself as the most trusted partner for clients, consistently proving its reliability and commitment.

Automotive & MobilityEnhancing Competitiveness in the Automotive Industry: Full Value Chain Participation in 4M Management


The automotive industry stands out for its stringent 4M (Material, Man, Machine, Method) approval procedures. Given the life-critical nature of automobiles, quality management is rigorous, and assessing the impact of even minor component changes on a finished vehicle is both complex and often infeasible.

Project Background

Our client, an automotive parts supplier specializing in precision products requiring advanced processing, produces materials and assemblies for automakers. Despite inherent challenges in cost reduction, the company has pursued competitiveness through standardization, lightweight designs, and process automation. With a vision to join the “Global Top 100 Automotive Suppliers by 2020,” the client has made securing cost competitiveness and global market contracts key strategic priorities. To add advanced methodologies to its ongoing cost-reduction efforts, the client partnered with Looxent to conduct a comprehensive cost-saving initiative.

Engaging All Departments and Suppliers Across the Value Chain

Cost-reduction strategies in the automotive industry must be tailored for mass-production and development models. For mass-production models, 4M approval constraints prevent changes to materials or suppliers but allow for improvements in manufacturing methods and processes. Given that suppliers often possess innovative ideas for process improvements, Looxent identified key suppliers by component and conducted structured workshops with their design and production teams. Through thorough preparation and an engaging atmosphere, the workshops elicited actionable ideas, overcoming typical supplier hesitancy in such collaborations.

For development products, the client had historically been less proactive in cost-reduction efforts, as the benefits often do not materialize immediately. However, addressing cost efficiencies during development is critical, as it enables the incorporation of cost-saving measures into mass-production components while strengthening the case for customer adoption. Looxent facilitated brainstorming sessions with the development team, gathering viable ideas and conducting feasibility assessments.

Revisiting Previously Unsuccessful Cost-Saving Initiatives

The client had earlier attempted to implement MRO (Maintenance, Repair, and Operations) procurement but abandoned the effort due to limited results. Excluding specific materials with inherent constraints reduced the overall savings potential, diminishing motivation for both the client and MRO vendors. Looxent reexamined this strategy, expanding the range of applicable items and systematically consolidating usage data. This data was shared with MRO providers to foster competitive bidding, ultimately maximizing savings and reinvigorating the initiative.

Innovative Approaches to Logistics Cost Optimization

While the client had stringent controls over domestic logistics, export logistics lacked clear accountability and cost-saving focus. Looxent began by digitizing usage data to establish a comprehensive database, analyzing costs for all export-related services, including ocean freight, inland transport, customs fees, and insurance premiums. By documenting routes and operational data, the client could select the most competitive logistics providers per route. Notably, optimization efforts led to cost reductions exceeding 30% for certain items, raising awareness of logistics management's strategic importance.

Additionally, recognizing the frequent price negotiations necessitated by multiple new projects and part developments, Looxent developed a supplier database. This resource consolidated historical transaction volumes, financial data, cost-reduction contributions, and proposal records, streamlining procurement processes and improving team efficiency.

Outcomes and Continued Efforts

The initiative strengthened the client’s existing cost-reduction framework, equipping them with tailored solutions for their operational needs. During the project, actionable improvement plans were implemented, and the client continues to pursue additional cost-saving measures independently.

Through Looxent’s comprehensive approach—engaging the full value chain, revisiting past strategies, and addressing underexplored areas such as export logistics—the client achieved enhanced operational efficiency and cost competitiveness, aligning with their long-term vision of becoming a global industry leader.



LOOXENT

A  21F. Parc.1 Tower2, 108, Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea 07335

T  02-546-8222      F  02-546-8226      E  service@looxent.com 

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© 2024 LOOXENT. ALL RIGHTS RESERVED.


LOOXENT

A  21F. Parc.1 Tower2, 108, Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea 07335

T  02-546-8222      F  02-546-8226

E  service@looxent.com 

© 2024 LOOXENT. ALL RIGHTS RESERVED.