‘The miracle of Turin’ – maximising performance improvement with a revolutionary approach to cost control
At the start of 2006, PA was requested by Fiat Auto to support an aggressive cost-reduction programme for annual purchasing of more than €1 billion. The programme covered four crucial new vehicle lines.
Through the programme, Fiat Auto:
- reduced component prices and renegotiated commercial terms
- restructured supply chains and gained cost advantages from low-cost countries
- analysed technical design and developed improved and innovative product concepts.
PA’s modelling expertise, hands-on engineering knowledge, technological edge and familiarity with industry best practice enabled it to transform Fiat Auto’s success.
Harald Wester, Chief Technical Officer, Engineering and Design, Fiat Auto, said: “The joint Fiat-PA team trebled the number of improvement ideas, and introduced a process that implemented them more quickly than before. Innovative new product designs will improve existing and future model development.” The programme has already added over €80 million of savings to the four vehicle lines on a yearly volume, and this is set to increase.
The joint team facilitated the cultural changes necessary to embed the new practices within Fiat Auto. Because of this, Fiat Auto can apply the same effective methodology to future programmes and other models.
PA believes this is one of the biggest and most comprehensive exercises of its kind ever undertaken, with amortisation of project cost in less than four weeks.
