In a market where technology moves fast, JLR has developed an industry-first procurement model that incentivises innovation and eliminates cost creep for some of its most recognisable vehicle components – headlights and tail lights. Working with consultants TWS, JLR developed a two-step game-theory-based tender process that builds a comparative picture of the market’s offering before allowing buyers to confidently enter fully committed negotiations. With the comparative pricing model, JLR buyers were empowered to negotiate with suppliers they knew were innovative, offered value for money and were committed to price stability, even if the design or specification of its exterior lighting changed. The result has been a lifetime saving of more than £535m, state-of-the-art technology and no more surprise costs.
Judges noted a commitment to the partnership: “It demonstrates new thinking with significant tangible benefits being realised both in terms of life cost savings and new innovative products.”