Ignacio Lopez was a visionary with nicknames as "Lopez the Terrible," "Hurricane Lopez," and "The Spaniard Who Makes the Germans Tremble (Lynn, 2005).During 1980’s and 1990’s when American automakers were facing tough competition from the Japanese car makers Ignacio stepped in as GM’s purchasing chief as GM had been losing its market share at home at an accelerating rate. Lopez brought his service providing and cut throat cost savings methods with him to ease the financial pain of General Motors.
Lopez applied his strategies to the purchasing policies of General Motors to make it cost competitive .To have the best distribution, marketing and cost-controlled operations were critical to creating a profitable business and diversified supplier-base. He wanted to revolutionize the General Motors purchasing demand by strategic sourcing. According to Jacobs and Chase (2010, p. 376), “strategic sourcing is the development and management of global supplier and relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business”. “The term sourcing implies a more complex process suitable for products that are strategically important.” Lopez further initiated on-target bids which were welcomed by the suppliers and “he felt that the tier-one suppliers such as TRW and AMP offered lower costs, excellent delivery, and design capabilities that could be integrated into GM’s product development activities. The primary criterion driving the move to external suppliers, however, was cost reduction” (Moffet &Youngdahl p.179, 1999).
Lopez applied the same tactics he applied to GM’s European operations where Opel was forced to cut off the local suppliers in favor of companies in other countries. He wanted the GM in America to seek suppliers in Canada, Mexico and even Europe so that complete advantage of greater efficiencies of bigger production runs.” Finally, Lopez sought to overturn the rules on who in the supply chain did what. The...
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