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3 Ways Arkestro Can Assist Your Automotive Sourcing Strategy

Automotive sourcing strategy is complicated, and few supply chains are as complex. Auto manufacturing embodies globalization, with assembly plants located across the world and many of them working on a just-in-time basis. 

According to Toyota, the average new vehicle contains over 30,000 parts, ranging from tiny screws to highly sophisticated computer chips. Producing those thousands of components are Tier 1, Tier 2, and Tier 3 suppliers. 

Each of these suppliers could be based anywhere in the world, and there is a dependency between many of the suppliers as well as between supplier and auto manufacturer. For example, a Tier 1 supplier typically sells finished components and parts directly to an auto manufacturer. Tier 2 suppliers provide the smaller pieces that are required to build the part, so they are usually shipping to a Tier 1 supplier. Tier 3 suppliers are typically focused on raw materials like plastics, which they provide to Tier 2 suppliers. 

Automotive Sourcing Complexities

Adding to automotive sourcing strategy complexity, companies that are part of the automotive supply chain may occupy several positions simultaneously. A company could be a Tier 1 supplier that ships completed modules directly to the automaker—it could also manufacture parts that it sends to other Tier 1 suppliers, making it a Tier 2 supplier as well.

Figuring out supplier tiers is akin to puzzling out who is who at a Halloween party—that masked Batman could be a total stranger, but could also be an old friend, and now you’ve been ignoring them for most of the night. Socially, it is awkward, but in sourcing, it could be detrimental to an organization’s bottom line. 

Traditional Sourcing Practices and Sub-Tier Suppliers

The result of multiple Tier suppliers is a tangled web involving thousands of companies (big and small) spread across multiple continents. If you’ve attempted making your own bread or pizza throughout the pandemic, it is likely you can relate. 

No one told you about the nuances of altitude, temperature, flour type, or keeping a starter alive. When sourcing automotive parts there are just as many (if not more) factors to consider, and traditional sourcing methods will be difficult to use. 

Shipping costs, currency conversion, and tariffs need to be added to typical sourcing factors like cost, quality, and turnaround time. Making the situation an even bigger challenge for procurement professionals are the issues facing the auto industry itself. These include rapidly changing technology, new models, inventory excess for models that aren’t selling as well as expected, recalls, labor relations, and the need for spare parts.

Tracking all of these variables using spreadsheets is a recipe for disaster. How do you source parts or raw materials at a competitive price, while fulfilling all your requirements and also adhering to the just-in-time needs of automakers? In the face of a crisis like the pandemic, how do you prioritize among your suppliers to decide which is critical and possibly worthy of assisting to ensure its survival?

A collection of spreadsheets is not going to cut it for automotive sourcing strategy. Legacy spreadsheets are chaos at the best of times. 

This is a situation where Arkestro’s AI-powered Predictive Procurement Orchestration platform offers a huge advantage. Here are three ways Arkestro will assist your automotive sourcing and procurement strategy.

Automated Negotiations and  Intelligent First Offers

Arkestro is the most modern Predictive Procurement Orchestration platform on the market. It leverages the power of AI (artificial intelligence), delivering a series of benefits. 

The most obvious win with utilizing AI is the elimination of mindless, repetitive tasks. Sourcing professionals using traditional systems spend much of their time manually completing tasks such as data entry and logging. AI and machine learning make quick work of these duties, freeing up personnel for more challenging responsibilities and eliminating the errors that can result from being stuck manually performing repetitive tasks for much of the day.

Arkestro advanced AI technology also offers far more advanced capabilities. A key strategic advantage is gained through the AI’s ability to enable automation of the bidding process. There’s no more guesswork involved. 

Artificial intelligence is capable of tracking and weighing the variables that can affect pricing, including requirements and competition, and strategic sourcing events can be calendared to run automatically. 

In this scenario, stakeholders are informed through every step of the process. Arkestro’s Predictive Procurement Orchestration platform can even give an Intelligent First Offer. This unique feature offers a big competitive advantage while reducing the time and effort involved in the negotiation process.

From freeing up sourcing professionals from routine, repetitive tasks, to the competitive advantage of AI-powered Intelligent First Offer, this advanced sourcing software delivers significant savings.

 

 

Strategic Sourcing and Predictive Procurement Collaboration

There are very few companies (if any) where the sourcing department works completely independently, serving as the sole point of contact with suppliers.

The more typical scenario involves supplier team members in contact with various departments and individuals at an organization, from the sales team to customer service. Each of those communications provides valuable insight into the relationship between a business and its suppliers. However, in a typical organization, each of those lines of communication is tracked on different systems, logged using different criteria, and offers varying layers of access to sourcing team members, creating siloes. 

With Arkestro, communications with suppliers all take place within the system in real-time. This includes messages, reminders, tasks, file sharing, and schedules. Arkestro offers unprecedented transparency and ensures critical information is not lost.

 

Proactive Supply Chain Management

Arkestro software is a highly sophisticated supplier management tool and supply chain analytics software. It tracks and manages all aspects of your company’s supplier information in one database, in real-time. Every communication between the supplier and your company is saved and available for review to anyone granted those permissions. With the power of advanced AI constantly analyzing all of this data—including supplier engagement and performance metrics—the right decision can be quickly made when difficult conditions call for working closely with key, at-risk suppliers. Proactive supply chain management is more than just a sourcing trend, it is a business imperative. Made by procurement professionals for procurement professionals, Arkestro is the predictive sourcing software that brings order and strategic decision making to the chaos of automotive sourcing. Schedule a demo today to see how your organization can benefit from Arkestro sourcing enablement software, and how you can source and track your 30,000 necessary parts.

 

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Rob DeSantis

Founder

As a former co-founder of Ariba running sales, Rob has deep expertise in the procurement space, having helped propel Ariba from zero to $250 million in revenue in four years and IPO of the year in 1999 before its acquisition by SAP a decade later. In addition to co-founding Ariba, Rob was also an early angel investor and board member of LinkedIn, the world’s largest professional online network.

More recently, Rob served as an investor and advisor to a small portfolio of companies including Bloom Energy, AEye, Inc., HiQ Labs, Agiloft, USEND and more. He is also a co-founder of Dibbs Technology and TrueParity. Rob holds a BSME from the University of Rhode Island.

Marty Meyer

Chief Financial Officer

A trusted partner and advisor on the executive team, Marty has a unique background having been the CFO of nine venture backed technology companies. Marty has raised over $300M in venture funding and has closed six strategic M&A transactions with a combined value of over $1B. Marty has deep domain expertise in ecommerce, consumer internet, networking, data security, data privacy, media technology and enterprise software industries. Marty is especially experienced in the finance and operations activities of SaaS companies and is driven by data and metrics to help create outstanding customer experiences and drive efficient growth.

Neil Lustig

President and Chief Operating Officer

Neil is a seasoned executive with over 30 years of experience leading and building teams in Tech. Neil brings insights from a variety of market spaces and company sizes. Most recently Neil was the CEO of GAN Integrity, an innovative SaaS Compliance technology company serving enterprise customers in North America and Europe. Before that Neil was the CEO of Sailthru, a leader in ML driven personalized multi-channel marketing communications for media and e-commerce markets. Prior to that Neil was the CEO of Vendavo, the leader in B2B price optimization and management for large enterprises. Before Vendavo, Neil led the commercial team at Ariba, the market pioneer that defined and created the eProcurement space. Neil served as the GM of Ariba Europe and subsequently the GM of Ariba North America. Neil started his career at IBM where he spent sixteen years, initially as a software developer, and then twelve years in a variety of Sales and Marketing roles

 

Neil has a BS in Computer Science and Applied Mathematics from SUNY Albany. He is a native New Yorker, Brooklyn born, and still resides with his wife and three children in New York City.

Bonnie Adams

Director of People Operations

Bonnie is a People Operations and HR veteran, with over a decade of experience establishing successful people and culture functions for early to mid-stage tech startups going through high growth phases. She has a passion for supporting and creating inclusive and collaborative work environments and is well-versed in driving positive changes in her organizations as a trusted leader. Prior to joining Arkestro Bonnie worked as the People & Culture Coordinator for Ionic Security, helping them scale from 5 to over 200 employees in addition to a $120M funding round. Most recently she was the Head of People & Culture for blockchain innovator Storj Labs and was the Director of Human Resources at PrizePicks, the largest independently owned Daily Fantasy Sports platform in North America.

Arym Diamond

Chief Revenue Officer

Arym Diamond joined Arkestro in January 2022 bringing over 20 years of experience in the enterprise software and consultancy industry.  He is responsible for the worldwide go-to-market revenue strategy. Prior to Arkestro, Arym was Chief Revenue Officer at CalAmp focused on Telematics and Logistics. He also served as the area vice president of North American Sales within the Salesforce.com Enterprise Business unit for Einstein Analytics & AI, where analytics and machine learning were re-imagined for the front office.  Prior to that, he spent over 10 years at Oracle in various sales positions. Arym holds an MBA from the University of Southern California Marshall School of Business, and an undergraduate degree from California State University.

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