Case Study: Sourcing Steel Pipe - Energy Company

By profiling the spend and creating a “should cost” model for finished line pipe, we were able to take $372M of spend to the global supply market. Through this process, nSource Advisors was able to identify four key strategies that generated $28.5M or 8% savings.

Project Results

Profile Pipe Spend, $M

Project Highlights

Client was building a 500 mile gas transportation pipeline
Historical approach at the client was to bid three current suppliers and award the business
It was uncommon for the client to negotiate pricing after the first bids were received
Developed a comprehensive RFP that included new global suppliers to increase competitive tension
Added two stages of post bid negotiations focused on total cost of ownership to drive savings
Developed a “Should Cost” model to drive cost transparency
Four strategies drove $28.5M of savings (8% of total spend)
Savings were 47x vs. fees