When Jean-Christophe Quemard took over purchasing at PSA/Peugeot-Citroen in January 2008, then-CEO Christian Streiff gave him a series of ambitious medium-term objectives. These included a 6 percent reduction in the French carmaker's 27 billion euro (about $38.8 billion) annual purchasing budget and a radical increase in sourcing from low-cost countries.
Quemard, 48, was diligently pursuing these goals when the global crisis hit in the second half of 2008. Targets he had previously planned to meet in 2010 were suddenly due by year-end.
"Purchasing is always challenging, and this year it's been more challenging than ever," Quemard said in an interview with Automotive News Europe earlier this year.
Quemard and his 1,000-employee procurement division is today at the center of efforts to help PSA, and its suppliers, weather the storm hitting the entire industry.
He knows that cutting costs will be key.
On the manufacturing side -- which represented 21 billion euros of procurement in 2008 -- this means asking suppliers to turn this year's decline in raw material costs into substantial reductions in purchasing prices.
While Quemard has been asked to squeeze suppliers, he is also their top ally within PSA. A 40-person unit within the purchasing division is closely monitoring activity at dozens of cash-strapped suppliers. The French carmaker has pledged upwards of 2 billion euros of assistance for suppliers in difficulty.
Quemard also is working with the company's 500 principal component suppliers to improve manufacturing procedures and reduce costs.
In 2008, Quemard says PSA helped suppliers cut costs by 200 million euros. It is looking for a similar improvement in 2009.
On the operational side, Quemard's procurement team is steering PSA's bid to cut general and administrative overheads.
Former CEO Streiff asked for a 30 percent reduction in 2010 compared with 2007 levels. Quemard intends to meet this goal by year-end.
'Even better' in 2009
New contracts for everything from travel and advertising to mobile phones and telecommunications cut 400 million euros from operational costs in 2008, and Quemard promises his team will do "even better" in 2009.
PSA's new CEO, Philippe Varin, told shareholders last month that the French carmaker must become a more global company if it hopes to survive.
Quemard is doing his part on that front as well, pushing forward plans to boost purchasing from low-cost countries that should help meet cost-reduction goals.
PSA is now sourcing about 40 percent of total purchasing from low-cost countries, principally through strong efforts at its non-European factories.
PSA launched an in-house Purchasing Business School during 2008 to better train procurement agents in international sourcing, among other things.
It also launched or reinforced purchasing offices in Turkey, China, Slovakia, Brazil, Argentina and India, all of which will help the company meet sourcing goals for the years to come.
Surviving the crisis may be the principal goal, but Quemard's agenda still includes a number of long-term goals. He remains committed to incorporating a minimum 20 percent of so-called "green plastics" into Peugeot and Citroen vehicles by 2011, compared with 6 percent in 2007, and continues pushing suppliers to reduce defect rates below 10 parts per million.