aPriori > Case Studies > Signify's Digital Transformation in Procurement with aPriori

Signify's Digital Transformation in Procurement with aPriori

Technology Category

Analytics & Modeling - Digital Twin / Simulation
Sensors - Optical Sensors

Applicable Industries

Oil & Gas

Applicable Functions

Procurement
Product Research & Development

Use Cases

Manufacturing Process Simulation
Smart Lighting

About The Customer

Signify, headquartered in the Netherlands, is the world leader in lighting for consumers, professionals, and the internet of things. They offer conventional, LED, and connected lighting solutions. Their innovative lighting solutions are supported by 37,000 employees spread across 70 countries. Their 2 billion+ LEDs sold have saved the equivalent carbon emissions of 23 million cars. As part of its commitment to global leadership in the lighting industry, Signify aims to ensure best-in-class procurement practices.

The Challenge

Signify, a global leader in the lighting industry, was seeking to enhance its procurement practices to ensure the acquisition of parts with the best cost, quality, and availability. The company aimed to expand its capabilities for generating should cost analyses for its products purchased from external vendors by 8 times. A 'should cost' refers to a projection of a given component’s cost if efficient manufacturing and distribution practices are followed. This understanding can help negotiate lower prices, identify opportunities for cost reduction, and foster more collaborative supplier relationships. However, manual should cost estimation is a time-consuming task. Signify needed an automated approach to optimize costs for their diverse portfolio of products. The company had previously partnered with aPriori in 2017 to generate select should cost models for mechanical parts, which proved successful.

The Solution

Signify decided to use aPriori’s digital manufacturing simulation to democratize should cost analysis. Procurement professionals only need to upload a 3D CAD file through a cloud-based web application. aPriori simulates manufacturing in a digital factory, providing fast, highly detailed should cost models that can be configured to reflect the diverse cost structures of real-life suppliers. A procurement professional can request a should cost analysis with only a few additional clicks. The requester receives an e-mailed report with a should cost summary, a more detailed cost breakdown in an attached Excel file, and a link to detailed cost and manufacturability analysis within aPriori. This detailed breakdown of component costs forms the foundation for more constructive, collaborative, and fact-based supplier negotiations. Signify sourcing professionals can collaborate with suppliers to develop a more efficient cost structure that is mutually beneficial.

Operational Impact

Signify's use of aPriori has led to a democratization of should cost analysis, creating a pipeline capable of handling a greater volume of should cost requests than ever. The software is easy and fast to use for procurement professionals, allowing any buyer to generate a should-cost model with a few clicks and less than one minute. This process leaves the full breadth of the digital factory in the background for users without a need for custom configurations. The automated process for generating should cost models for Signify’s large portfolio of existing parts is used to identify outliers, allowing the procurement team to focus on bringing down costs for components with the greatest possible potential for savings. Looking forward, Signify plans to leverage aPriori’s sustainability features to build a Design to Sustainability Culture, integrating carbon costs with their automated should cost modeling strategy.

Quantitative Benefit