aPriori > Case Studies > Reducing Supplier Costs with aPriori: A Case Study on HARMAN

Reducing Supplier Costs with aPriori: A Case Study on HARMAN

Technology Category

Analytics & Modeling - Digital Twin / Simulation
Functional Applications - Manufacturing Execution Systems (MES)

Applicable Industries

Buildings
Electronics

Applicable Functions

Procurement
Product Research & Development

Use Cases

Digital Twin
Manufacturing Process Simulation

Services

System Integration

About The Customer

HARMAN is a high-tech electronics company with a diverse range of product offerings. The company employs 30,000 people and generates $8.8 billion in revenue. HARMAN was in search of a technology that could provide them with a detailed insight into the cost structure of their products and offer transparency into the pricing offered by third-party suppliers. The company needed a solution that could quickly analyze a design and correctly allocate costs using unique, supplier-specific cost drivers. This was crucial for building a true partnership with suppliers and avoiding contentious negotiations.

The Challenge

HARMAN, a high-tech electronics company with 30,000 employees and $8.8 billion in revenue, was facing a challenge in managing supplier costs. The company was in need of a technology that could efficiently integrate with design and sourcing workflows, work directly with 3D CAD models, and handle the varied manufacturing processes required by their diverse and often complex product offerings. The main issue was the lack of transparency in the pricing offered by third-party suppliers. HARMAN needed a solution that could provide detailed insight into product cost structure and quickly analyze a design to correctly allocate costs using unique, supplier-specific cost drivers. This was crucial for building a true partnership with suppliers and avoiding contentious negotiations.

The Solution

HARMAN chose aPriori to address their challenge. aPriori’s ability to configure custom digital factories for a variety of production processes made it a flexible solution for a wide variety of HARMAN products. The technology was used to simulate manufacturing for diverse products, providing HARMAN with manufacturing cost models for production processes including plastic molding, stamping, die casting, electro-mechanical components, and more. aPriori’s speed in analyzing a design to generate a digital twin almost instantly once a 3D CAD is uploaded was also a key factor in its selection. This facilitated more transparent sourcing without slowing down the development process. Furthermore, HARMAN used aPriori’s simulated manufacturing cost models to work with suppliers to identify cost inefficiencies and develop a transparent, mutually shared understanding of that supplier’s manufacturing cost structure.

Operational Impact

The implementation of aPriori has led to significant operational efficiencies for HARMAN. The technology has enabled the company to work collaboratively with suppliers to identify cost inefficiencies and develop a shared understanding of the supplier’s manufacturing cost structure. This has not only helped keep costs down but has also nurtured long-term supplier relationships based on trust and win-win negotiations. The use of aPriori’s manufacturing cost models has streamlined the RFQ process, reducing delays and substantial expenditures of time and resources. Looking ahead, HARMAN aims to implement a Zero RFQ capability, which will further enhance operational efficiency.

Quantitative Benefit

Streamlined RFQ process, reducing time and resource expenditure
Potential for a fully automated Zero RFQ process in the future
Instant generation of a digital twin once a 3D CAD is uploaded, speeding up the development process