From February 2022 to July 2022, my internship at “Robert Bosch GmbH branch in Italy”(RB) involved a comprehensive exploration of a critical challenge faced by TIER1 suppliers within the automotive industry. These suppliers often sign long-term supply contracts with OEMs with fixed sales prices leaving their operating margin vulnerable to unexpected cost increases in their production inputs. This vulnerability became evident due to a significant surge in raw material prices from early 2020 to May 2022. Therefore, the main aim of this thesis is to understand how TIER1 suppliers can effectively navigate such a challenging scenario. This analysis encompasses both strategic and operational perspectives, employing resources such as literature, online sources, and the knowledge I acquired during the time spent at RB.