Material cost reduction comprehensively cross-functional process approach

The entire value chain in the automotive industry is intensely pursuing cost reduction in particular purchasing cost reduction as purchased components often represent over 50% of total costs. This challenge can be addressed by material optimization programs which are integrating cross-functional capabilities in particular for global operating companies. Daimler Trucks, the global truck division of Daimler AG, and the Fraunhofer IPT established a comprehensive approach integrating interdisciplinary perspectives by making use of the optimization tools such as linear performance pricing, variant tree and in-depth process cost calculations. Therefore the aim of the paper is twofold. The primary aim is to describe the established crossfunctional process approach integrating the application and interpretation of tools such as linear performance pricing. The secondary aim is making users aware of its potential pitfalls and indicating starting points for problem resolution.