Strategic Sourcing CompetitionTeam 4

Omar Alaswad

Robert Britt

Ye Jin

Collette Latiolais

Shivani Patel

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Agenda

Safety Moment

Spend Analysis

Market Assessment

Strategy

Implementation

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DID YOU KNOW THE KEY ELEMENTS IN THE CHEMICAL SAFETY FORMULA ARE KNOWLEDGE AND CAUTION.

The Halliburton 10 to Zero Life Rules are a compilation of basic rulesthat all Halliburton employees know and live by. These are key components for identifying and managing the hazards in our business.

From the field, to the lab, to the plant and beyond, chemicals abound in oil and gas related industries. Working with them safely requires proper controls, equipment, and behavior.

Never handle or store chemicals without understanding potential hazards associated with them by reading and following the directions on the safety data sheets (SDS). Always use Personal Protective Equipment (PPE) when working with chemicals as prescribed by the SDS. Don’t mix chemicals if you’re not positive of their compatibility. If any doubt exists, stop work and get clarification before you act.

At Halliburton, solving customer challenges is second only to keeping everyone safe and healthy. You can find more safety tips at www.halliburton.com/HSE

Chemical Handling

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Spend Analysis

Non-addressable spend: $8,004,051.68

Supplier Density: 27.205%

Unaddressable spend: 18.99%

True category spend: $486,288,591.23

Assumptions

Standardized units of measure

to gallons

Standardized currency to USD

using yearly average

conversion rate

Standardized regions in

accordance with Halliburton

policy

Did not include Lab samples

Distinguished unaddressable

data

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Spend Analysis- by region

$283,100,824.50

$22,737,236.64 $12,847,657.51

$3,844,533.31

$463,481.22

$14,693,515.30

$56,623,507.92

$91,977,834.83

Region SpendNorth America 283,100,824.50$ Middle East 91,977,834.83$ Eurasia 56,623,507.92$ Central/South America 22,737,236.64$ Europe 14,693,515.30$ Africa 12,847,657.51$ Asia 3,844,533.31$ Australia and Oceania 463,481.22$ Grand Total 486,288,591.23$

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Spend Category Breakdown

HCl Type Spend Percentage36% HCl, 22 Baume 428,741,000.84 88.166%28% HCl 33,030,378.70 6.792%32% HCl, 20 Baume 20,811,502.06 4.280%24% HCl 2,977,113.16 0.612%% Unknown 723,089.23 0.149%15% HCl 5,507.23 0.001%

486,288,591.23 100.000%

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Supply Market Assessment- SWOT

Strengths:• Multiple suppliers• No clear alternatives• Increasing Demand• Pharmaceuticals• Food Processing• Steel Pickling• Oil Drilling

Weaknesses:• Not meeting demand• Byproduct of other chemical processes• High supply chain risk• Safety• Logistics

Opportunities:• Increasing supplier capacity• Increase R&D for new manufacturing

processes

Threats:• Increased environmental regulations• Development of alternatives• Decreasing direct demand of product source

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Trend

▌ Based on 3 years data:

Price2012 1.11$ 2013 0.87$ 2014 0.76$ 2015 0.66$ 2016 0.59$ 2017 0.53$

Total Quantity2012 131,108,241 2013 253,576,767 2014 326,389,347 2015 377,188,125 2016 416,827,612 2017 449,215,543

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Porter’s Two* Forces

Intensity of Rivalry

• Concentrated market• dominated by distributors

• High fixed costs• Manufacturing facilities

• Slow industry growth• Decrease in industry capacity

Buyers

• Intense industry rivalry• Oil & Gas• Pharmaceuticals• Steel Pickling• Food Processing

• Increased competition in oil and gas industry

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Strategy

Supplier Identification

• Current Suppliers: 48

• Unaddressable supplier: 1

• 47 addressable suppliers

Supplier Rationalization

• Rationalized by regions• Tight supply• Logistics cost

• Used Pareto’s Law

Post-Rationalization

• Eliminated 21 suppliers

• 26 rationalized suppliers

• New supplier density: 76.029%

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Implementation

▌ Close out existing contracts with eliminated suppliers

▌ Negotiate a 3 year contracts with 26 rationalized suppliers

▌ Estimated 10% discount rate for 3 year contract

Region SavingsNorth America 53,131,061$ Middle East 21,909,070$ Central/South America 16,225,271$ Africa 7,241,201$ Europe 3,939,084$ Asia 1,238,689$ Eurasia 333,081$ Australia and Oceania 84,403$

104,101,859$

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Thank you!

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Works Cited

• Bowen, Bill. "US Hydrochloric Acid Prices Rising On Short Supply." ICIS Chemical Business 285.24 (2014): 22. Small Business Reference Center. Web. 16 Oct. 2014.

• Hargreaves, Steve. "Clean Fracking: Moving to Replace Chemicals." Money.cnn.com. N.p., n.d. Web.

• Guzman, Doris de. "US HCI Tightens On Tracking Demand." ICIS Chemical Business 281.16 (2012): 23. Small Business Reference Center. Web. 16 Oct. 2014.

• "HSE Safety Moments." - Halliburton. N.p., n.d. Web. 16 Oct. 2014

• "Hydrochloric Acid." IHS Home Page. N.p., Aug. 2012. Web. 16 Oct. 2014. • "Hydrochloric Acid | Prices, News & Market Analysis | ICIS.com."

Hydrochloric Acid | Prices, News & Market Analysis | ICIS.com. N.p., Sept. 2012. Web. 16 Oct. 2014.