Delphi Corp. is closing in on its last corner of waste.
In the past few years, the company has focused on six areas that comprise about 90 percent of its cost structure. Now it's time for the remaining 10 percent.
Delphi has been squeezing waste from engineering, manufacturing, manufacturing engineering, production control and logistics, global supply management/purchasing and business line executives. Now the world's largest supplier turns its attention to finance, human resources and public relations/public affairs/communications.
"By the end of this year easily, we will have 100 percent of the different functions all involved," said Don Runkle, Delphi's vice chairman of enterprise technologies yesterday at the Management Briefing Seminars.
Runkle also said Delphi has started to quote "a substantially fewer number of suppliers than we currently have" in order to reduce its supply base. Delphi is setting up strategies for each of its 30 commodities to determine which suppliers it should continue doing business with.
"Do we want to buy this locally or can we use a few global suppliers? It varies by commodity," Runkle said. "As that criteria becomes clear - some are quite advanced and some are just starting - we're bringing the supply base through that criteria and matching up. Out of that will turn out how many suppliers we need."
Delphi has begun the process with electronics suppliers, for example.
"We're looking for some supply there, for instance, out of the Asia-Pacific area, in China," Runkle said. "We get quite a bit out of there today and we think we should get more out of there."
The company is notifying suppliers if they don't make the cut, he said, giving them time to find other business before their Delphi contracts end.