By streamlining its supplier base, Fortaco can better meet the quality, delivery, cost and safety requirements of its customers, says Krzysztof Michel, Senior Vice President of Group Sourcing at Fortaco. In addition to constant evaluation, utilising synergies within the Group’s wide geographical footprint is a key element in achieving the Group’s goals.
“Fortaco’s sourcing philosophy is in line with the company’s mission. We aim to reshape the way things are produced in order to create added value for customers. From the sourcing perspective this also means reshaping the way components and services are sourced,” says Krzysztof.
For the most part, Fortaco’s present supplier base has been formed out of the company’s heritage from Ruukki Engineering and Komas.
“The outcome of merging two organisations was a significant and scattered supplier base located to the great extent in High Cost Countries (HCC). To have good control over our sourcing and optimise cost, we are focusing on a limited number of suppliers. We have streamlined and selected the partners that we would like to continue with and limited the number of vendors from HCC we work with. At the same time, we have also identified new companies in Best Cost Countries (BCC) whom, after passing our evaluation process, we can partner with.”
Fortaco creates a competitive advantage by pursuing a geographically wide group approach. The Group Office for Fortaco Sourcing is located in Wrocław, Poland, a city that offers excellent opportunities for the acquisition of competent resources. Most importantly, it is the most convenient location in the Fortaco footprint for managing suppliers from Best Cost Countries and High Cost Countries.
“In comparison to our competitors, our advantage is our wide geographical and professional footprint. Because of our locations, we are closer to the markets and are able to do successful sourcing in the BCC. We also have strong market expertise, and therefore, we can offer synergistic benefits to our customers.”
In addition to the suppliers chosen by the company itself, Fortaco is working with suppliers that are selected by its customers.
On the whole, the Group is developing its sourcing to be more and more strategic instead of focusing in addition on transactional day-to-day operations.
“We can see that the importance of advanced business analysis has increased dramatically. Instead of just the cost of the purchase itself, to fulfil our customer demands, the total cost of ownership must be taken into account.”
