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“We offer suppliers a reliable volume and a good platform to show their products.”

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Julian Buckley speaks with Dr. Klaus Dräger, member of the board of management of BMW AG, Purchasing and Supplier Network, about how the premium OEM and its related brands manage procurement, looking at the major purchasing processes, overall cost reduction and the BMW cost calculator

Can you outline how purchasing works across BMW? It’s important to look at four major topics when it comes to making purchasing decisions at the BMW Group. These are cost, quality, flexibility and innovation. Honestly, I don’t think we have a cost issue. This is because we have very good internal cost calculations. This means we can calculate part prices and the production costs of any component we are purchasing. We can define this quite accurately. If we don’t get the price we were looking for from the supplier, what we call the ‘best practice’ price, we are open to share our best practise calculation with the supplier. This helps both parties understand the differences between both calculations. Usually, we end up quite close to each other in terms of price, but this is how we can bridge the gap if the price is too high. But in some cases we also see the opposite, the supplier offering a component far below our best practice prices.

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