The document is a presentation by Team 4 for a strategic sourcing competition at Halliburton. It includes an analysis of Halliburton's hydrochloric acid spend over multiple regions and development of a strategy to rationalize suppliers. The team conducted a spend analysis, market assessment, and developed a strategy to eliminate 21 suppliers and negotiate a 3-year contract with the remaining 26 suppliers to achieve estimated savings of $104 million. The presentation includes sections on safety, spend analysis, market assessment, strategy, and implementation.

1. Strategic Sourcing Competition
Team 4
Omar Alaswad
Robert Britt
Ye Jin
Collette Latiolais
Shivani Patel

2. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 2
Agenda
Safety Moment
Spend Analysis
Market Assessment
Strategy
Implementation

3. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 3
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 rules
that 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
© 2014 Halliburton. All rights reserved.

4. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 4
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

5. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 5
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
$91,977,834.83
Region Spend
North America 283,100,824.50$
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$

6. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 6
Spend Category Breakdown
HCl Type Spend Percentage
36% 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%

7. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 7
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

8. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 8
Trend
▌ Based on 3 years data:
Price
2012 1.11$
2013 0.87$
2014 0.76$
2015 0.66$
2016 0.59$
2017 0.53$
Total Quantity
2012 131,108,241
2013 253,576,767
2014 326,389,347
2015 377,188,125
2016 416,827,612
2017 449,215,543

9. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 9
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

10. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 10
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%

11. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 11
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 Savings
North 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$

12. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 12
Thank you!

13. © 2014 HALLIBURTON. ALL RIGHTS RESERVED. 13
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.