ZF's 2015 growth plan puts squeeze on suppliers

  • 17-Sep-2012 10:17 EDT

ZF headquarters is placing greater emphasis on suppliers' global capabilities.

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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