Implementation of an “International Procurement Organization (IPO)” as part of the low-cost country sourcing strategy

Goal: Cost reduction by using a worldwide supplier network, especially from low-wage countries


Duration: 8 months
Role in the project: Project Manager / Coordinator

Operational area, geographical:

  • Germany
  • Global
  • Eastern Europe


Type: Rail vehicle manufacturer
Turnover: 4.5 Bn. EUR
Number of employees: 22,000


The introduction of IPOs was intended to exploit the cost advantages of low-wage countries for the contracting of labour-intensive prefabrication in order to reduce the overall costs of the company’s own product. In doing so, the IPOs were to serve as an extended arm of local project purchasing.


  • Definition and implementation of an International Purchasing Organization (IPO) in Asia and Eastern Europe
  • Definition of the LCCS processes
  • Budget preparation for IPOs and LCCS organization
  • Establishment of the organization in Eastern Europe
  • Search, selection, certification and development of new suppliers
  • Introduction of the new suppliers to the purchasing community
  • Ensuring the first delivery to the plants in accordance with the requirements


  • Purchasing managers in the regions
  • Engineering managers of the divisions
  • Group Controlling Specialist
  • Group Human Resources Specialist
  • External consultants


  • Monthly update in the Procurement Steering Committee to CPO and CEO


  • Divisional Purchasing Managers
  • Head of Group Engineering
  • Head of Group Finance


  • Development of IPOs in China and Eastern Europe
  • Assignment to lead IPO development in Eastern Europe
  • Placement of 20% of group-wide purchasing volume via the IPOs with total cost savings of 17%


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