Purchasing Management and process improvements: The Italdesign Giugiaro case

This thesis work, the result of an internship at the Purchasing department of Italdesign Giugiaro in Moncalieri (TO), has the aim of introducing improvements to the current purchasing process of components for the physical development of a car. To do this, it is first necessary to provide a general overview of Purchasing Management, basic concepts of Lean Supply Chain and the evolution of Procurement activities, strategic activities that allow companies to have a competitive advantage in the market. The tools, necessary to better address Purchasing Management problems, that have made the purchasing area definitely important in the business context over the years, have been studied and analyzed in this thesis. After a brief introduction to Italdesign, a focus on the most important businesses and key activities, the study focuses on the standard procedures used by the company's purchasing department for the choice of assigning a supply and on the performance indicators to which the department must refer; the goal was to identify possible areas for improvement and to propose solutions both in the short and medium - long term suitable for improving the present situation. Analyzing the situation, it was found that, from a purely operational point of view, the activity that requires greater effort is the phase of identifying suppliers, sending quotation requests, collecting offers, "make or buy" analyzes, comparing suppliers and nomination. Starting from the available data deriving from the DaVinci project, a tool for improving activities in the short term has been implemented: an automated benchmark that analyzes all aspects of quality, costs and timing, which must be constantly monitored by buyers and management to immediately understand which corrective actions must be taken into account to address the critical issues encountered. Attention has fallen on the analysis of the costs allocated to the most critical product classes, precisely because the inefficiencies related to these classes certainly have a greater impact on the development of a vehicle and on the total costs associated with it. Each product class was identified within the Kraljic matrix, in order to be able to compile an efficient action plan in relation to relations with suppliers; for each of them the Cost Breakdown Structure has been identified to understand where to operate in case of criticality and have negotiating power; for each one, the constant control of the achievable Saving and comparison with the relative Budget was highlighted. As a study of medium-long term improvements, a multi-criteria analysis method for decision-making (MCDA) called Analytic Hierarchy Process (AHP) was studied and applied. This mathematical model has made it possible to relate both quantitative and qualitative criteria in terms of Quality, Costs and Timing, by prioritizing the various alternatives, in order to obtain an objective and clear compromise solution, in a complex problem such as the supplier nomination. Finally, the results obtained with respect to the objectives will be described. Generally, both the short-term objectives and the changes expected for the medium-long term, result an improvement in Procurement activities in terms of reduction of subjectivity in purchasing decisions, increase in process efficiency, cost savings, timing cut and quality improvement.