1. Axalta Coating Systems
Case Study STAR Report 1
1
SITUATION
ACTION
TASK
RESULT
Incumbent is NA’s single-source, software, hardware, peripherals, support and
maintenance supplier for technology interface to customers
NA spends $18MM with Incumbent annually
The single source relationship is high risk because:
• A software/hardware/service interruption creates a customer shutdown
• Incumbent does not have a disaster recovery program
• Incumbent does not have a leadership succession plan
Devise Strategic near-term/far-term plan to address:
• Service Interruption risk
• Disaster recovery and succession plan risk
• Reduce costs
Vet the opportunities to:
• Subcontract with a Competitor
• Institute Champion/Challenger model available to all customers
• De-couple software, hardware and service offerings into a multi-
supplier program to reduce cost/mitigate risk
Identified 2 viable alternates and leveraged incumbent for a new
agreement including :
• $2.5MM/14% in annual savings
• Additional continuous improvement savings
• Disaster Recovery Plan
• Business Leadership succession plan
• Make/buy option
Procurement teamed with leaders in Refinish, IT, Legal & Finance to:
• Understand Incumbent’s entire offering and sculpt the future requirement
• Vet potential competitors
• Estimate schedule and resources required for transition to a new supplier
• Evaluate transition risks/costs
• Explore a de-coupled solution and & or multiple service level offerings
• Estimate/deconstruct Incumbent internal costs for make/buy analysis
• Develop disaster recovery and succession requirement
• Determine best option to ensure uninterrupted service, eliminate single
• source contractual restrictions and close cost to revenue gap