Global Metals – Fortune 500 Company

This Fortune 500 company purchases over 400,000 metric tonnes of metal annually (~500 Million USD) across 30 unique operating companies in 18 countries. Previously, the client relied on over 250 metal suppliers. Seeking to enhance overall efficiencies, maximize financial outcomes, and drive product innovation, the client aimed to adopt a global strategic sourcing process.

The KGM team conducted an in-depth analysis of the client’s supply base, technical requirements, customer needs, and annual metal expenditures. Specifically, the KGM team:

• Conducted 500 interviews with cross-functional and cross-divisional professionals, gathering extensive data to benchmark costs and processes.
• Identified opportunities to collaborate with global suppliers for operational benefits and cost reductions.
• Recognized the critical need for skill-based training and development programs.

To capitalize on identified cost-saving opportunities, KGM implemented an 11-Gate Strategic Sourcing Process targeting four primary metal categories: Carbon Steel, Stainless Steel, Copper, and Aluminum. KGM trained and collaborated with over 300 client professionals to strategically source all metal requirements. In total, the client and KGM negotiated with and physically visited 75 of the top suppliers globally.

• Gathered and outlined detailed technical and commercial data requirements.
• Trained client teams in Process Methodology, Executive Communications, Global Negotiations, Site Assessments, and Alliance Management to ensure sustainability of benefits (total training exceeded 15,000 hours).
• Defined and carefully developed each negotiable issue for effective and efficient negotiations.

KGM identified, evaluated, and captured supply chain savings by training over 300 professionals, introducing and customizing an 11-gate sourcing process, and creating databases for the client to benchmark their supplier base. This resulted in establishing long-term partnerships with 30 world-class mills and service centers.

The project generated over $40 million in realized annual cost savings, representing a significant improvement, and reduced the supply base by over 90%. This was achieved by forming mutually beneficial strategic alliances with selected suppliers. These relationships with global metal suppliers will continue to drive cost reductions across the company.