Chrysler Files Suit Against Accenture Claiming Global Sourcing Cock Up

With a hat-tip to a long-term industry informant who will go by the initials -- or would that be code-name -- “SM”, I just learned about a story from Automotive News (registration and subscription required) that Chrysler is suing Accenture for failure to deliver on $900 million in promised savings from a low-cost country sourcing initiative. According to the article, "Chrysler paid at least $7.7 million to Accenture for help buying parts in low-cost countries such as China and India. Chrysler thought doing so would save $900 million. Instead, Chrysler saw virtually no savings, court documents say."

The article quotes part of the complaint that suggests Accenture pursued some utterly odd sourcing strategies. To wit, "Accenture advised Chrysler to send out for bid -- all at once -- $7 billion of annual value of business (10,000 parts), in giant requests with bundled commodities to random lists of suppliers." What's my quick take? Not knowing the specifics of this case, there's probably equal blame to go around even if Accenture never came through in the end, delivering on the promised savings. Consider: why would Chrysler have paid Accenture the final payment (as they did) for an incomplete project deliverable/work product?

Methinks there's something under the surface here. For example, perhaps Accenture did deliver some savings that Chrysler ended up not being able to -- or not wanting to -- implement. Or perhaps rising currency and transportation costs ultimately ate into the savings that Accenture original promised. Who knows. Even though it might feel like fun to get on the “bash the consultant bandwagon” I doubt that the blame rests entirely with one party even if Chrysler did not get what they bargained for (and even if Accenture was underqualified to deliver in the first place).

- Jason Busch

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