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Achieving 20% product cost optimisation of a transfer case - Magna Powertrain

MAGNA Powertrain is an international manufacturer of drivetrain components and systems in the automotive industry located in Graz, Austria. The company belongs to MAGNA International Inc, one of the largest automotive suppliers worldwide. PA Consulting Group supported the product cost optimisation of a new transfer case family for four-wheel-drive cars with a high annual volume.

Four years prior to the start of production, estimated product costs of the transfer case were above budget. Due to the high annual quantity and different variants, savings of at least 10% of the actual cost had to be realised to ensure profitability of the project. PA conducted a benchmarking project comparing five competitor transfer cases and transferring all relevant best practice to the new design.

After the first three phases potential cost savings of 20% were identified. After the first six months of the implementation phase - supported by PA - savings of 12% were achieved by the project. The transparency of cost and results could be used as basis for supplier negotiations in order to realise further savings.

"Because of the excellent work of the whole team, the cost could be reduced at a early stage of the development phase, an increase of costs could be avoided.” - Member of the board, Magna Powertrain AG&CO. KG

To find out how PA can realise product cost optimisation in your business, please contact us now.

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