Supplier Base Optimization on MWM MAR-I Diesel Engines Launch

Due to the introduction of PROCONVE MAR-I emission regulation, the Brazilian automotive industry developed Diesel engines to comply with this legislation demanding new components to automotive supplier base. However, at the same time this industrial sector was facing a difficult financial situation caused mainly by the crisis that impacted Brazil in last years. In 2015, around 27 local suppliers filed for bankruptcy affecting the whole Automotive Supply Chain. This scenario already represents a problem for current products established in market, but it represents a major challenge for new launches. This paper will discuss how MWM Motores Diesel made sourcing decisions and manage to develop components and suppliers in this harsh scenario, also looking for the supplier base optimization. This was a two-year project that involved 97 new part numbers and some of the key successful factors was supplier collaboration to meet technical MAR-I requirements; synergy between Engineering, Purchasing and Suppliers to meet timing and budget restriction; local supplier development based on +60 years of MWM’s experience with Brazilian suppliers and sourcing process review targeting early supplier definition since the prototype phase. This methodology successfully supported MWM from regulatory approvals to the start of production.