Introduction

Following the bankruptcy of the Van Hool bus brand and its acquisition by VDL, an interim manager of PORAZIET was assigned to reinstall the legacy parts business under the newly created legal entity VDL Parts Belgium. The primary objective was to reestablish a robust supply chain and ensure continuous sales turnover with competitive margins. This reference case outlines the key tasks and responsibilities fulfilled in the role of interim purchase lead, resulting in a fully operational parts business within nine months.

Reinstalling the Complete Supply Chain

The first critical task was to reinstall the complete supply chain for both buy and make parts. This involved:

• Supplier Identification: Identifying and re-engaging with former suppliers and sourcing new ones to ensure a reliable supply of parts.
• Supply Chain Mapping: Mapping out the entire supply chain to identify potential bottlenecks and areas for improvement.
• Logistics Coordination: Re-establishing efficient logistics processes to ensure timely delivery of parts.

Negotiating Terms and Conditions

Newly negotiating terms and conditions with every supplier was essential to secure favorable agreements. This included:

• Contractual Framework Agreements: Developing and negotiating comprehensive contractual framework agreements with each supplier to ensure clarity and mutual understanding.
• Terms and Conditions: Ensuring that the terms and conditions covered key aspects such as pricing, delivery schedules, quality standards, and payment terms.
• Risk Mitigation: Including clauses to mitigate risks related to supply chain disruptions and price fluctuations.

Building a Local Parts Purchasing Team

Building a competent local parts purchasing team was crucial for the success of the project. This involved:

• Recruitment: Hiring skilled purchasing professionals with experience in the automotive and parts industry.
• Training: Providing training on the newly implemented purchasing processes and systems to ensure the team was well-prepared.
• Team Integration: Integrating the new team into the organizational structure and fostering a collaborative work environment.

Implementing Purchasing Processes and Systems

Implementing existing purchasing processes and systems into the newly created business entity was a key task. This included:

• Process Standardization: Standardizing purchasing processes to ensure consistency and efficiency.
• System Integration: Integrating purchasing systems with other business systems to streamline operations and improve data accuracy.
• Performance Monitoring: Establishing key performance indicators (KPIs) to monitor and evaluate the effectiveness of the purchasing processes.

Cooperation on Volume Bundling Opportunities

Initiating cooperation on volume bundling opportunities with sister company VDL Parts Netherlands was a strategic move to leverage economies of scale. This involved:

• Joint Procurement: Coordinating joint procurement activities to negotiate better terms and prices with suppliers.
• Volume Discounts: Securing volume discounts by consolidating orders and increasing purchasing power.
• Shared Resources: Sharing resources and best practices between the two entities to enhance overall efficiency.

Securing Parts Pricing on Cost-Plus Base

Securing parts pricing on a cost-plus base was essential to avoid sales margin loss. This involved:

• Cost Analysis: Conducting detailed cost analysis to understand the true cost of parts and negotiate fair pricing.
• Pricing Agreements: Establishing pricing agreements that included cost-plus terms to ensure transparency and protect margins.
• Regular Reviews: Regularly reviewing pricing agreements to ensure they remained competitive and aligned with market conditions.

Contributing to Organizational Setup

Actively contributing to further structuring the organizational setup was vital to accelerate parts business growth. This included:

• Organizational Design: Designing an organizational structure that supported efficient operations and clear lines of responsibility.
• Process Optimization: Continuously optimizing processes to improve efficiency and reduce costs.
• Growth Strategy: Developing and implementing a growth strategy to expand the parts business and increase market share.

Results

After nine months, the parts business was fully up to speed with continuous sales turnover and competitive margins. Key achievements included:

• Operational Supply Chain: A fully operational supply chain with reliable suppliers and efficient logistics.
• Competitive Pricing: Secured competitive pricing agreements that protected margins and ensured profitability.
• Skilled Team: A skilled and integrated local parts purchasing team driving the business forward.
• Accelerated Growth: Accelerated business growth through strategic organizational setup and cooperation with VDL Parts Netherlands.

Conclusion

This reference case demonstrates the successful reinstallation of the legacy parts business at VDL Parts Belgium. Through supply chain management, effective vendor negotiations, team building, and process implementation, the business early picked up significant growth and operational efficiency within a short period of time after the bankruptcy.