Michael Keith's professional bio outlines his 6 years of procurement experience in strategic sourcing roles for oil and gas, mining, and industrial companies. It also lists his portfolio of strategic sourcing projects that achieved cost savings through negotiations, spend analysis, and contract management. The bio demonstrates extensive experience in procurement, contracts, analytics, and strategic sourcing.

1. Michael Keith
PROFESSIONAL BIO

2. Professional Bio
 6 years Procurement experience.
 Sourcing Specialist, Friedkin Companies, Inc. – August 2010 - present
 Strategic Sourcing Team Lead, Halliburton – 2 years, 9 months
 Contract Administrator, BHP Billiton – 1 year, 7 months
 Over 4 years Oil and Gas Procurement experience.
 Over 4 years experience in Strategic Sourcing.
 6 years contract negotiations experience.
 6 years analytical experience conducting spend analysis and constructing
should cost and TCO models.

3. Michael Keith
PORTFOLIO OF STRATEGIC SOURCING
PROJECTS

4. International Household Goods Relocation Services Strategic
Sourcing Project
Pre-Sourcing State:
 5 incumbent Forwarders used.
 Fragmented supply base and spend distribution.
 No contracts.
 No Forwarder performance management.
 Cost plus percentage of cost pricing.
 No Forwarder incentive for cost control.
 Forwarders selected for service with no regard to cost.
 Inefficiencies on air freight and no restrictions on size of items shipped.
 Based on weights and not volumes which is charged in international
markets.
 Transferees shipping non-essential items. i.e. Mattresses.
 Inefficiencies in invoice auditing.

5. International Household Goods Relocation Services Strategic
Sourcing Project
Post-Sourcing State:
 1 incumbent and 1 new Forwarder awarded contracts.
 Decrease supply base and leverage spend for better pricing.
 Flat rate pricing received by region.
 Simplifies invoice audits.
 Forwarder incentive for cost control.
 Quarterly Forwarder performance reviews.
 Routing guide created to assist in selection of the correct Forwarder with
the most competitive pricing by region.
 Increased efficiencies on air freight and restrictions on size of items
shipped.
 Utilize approved air shipping containers and charged based on volume.
 Transferees restricted to filling approved container.
 Annual estimated price to price savings of $1.7M.
 Includes $100,000 end of year rebate with 500 annual moves.

6. Global Personal Computer Strategic Sourcing Project
Pre-Sourcing State:
 1 incumbent supplier used.
 Contract in place with 3 year term.
 e-Catalog implemented to ERP system.
 Fixed PC pricing has not been re-negotiated for 3 years.
 Computer Manufacturing Producer Price Index has decreased year over
year for the last 3 years.
 Only 2 other PC manufacturers that can meet global demand requirements.
 Favorable market to re-negotiate contract with incumbent rather than
conduct an RFP.

7. Global Personal Computer Strategic Sourcing Project
Post-Sourcing State:
 Developed laptop cost model and negotiated a 7% price reduction from
supplier proposed pricing.
 Extended agreement for 3 years and included a Price Adjustment clause to
allow for price changes due to market conditions.

8. Carbides Manufacturing Strategic Sourcing Project
Pre-Sourcing State:
 5 incumbent suppliers used.
 Contracts with all suppliers.
 Carbide parts being manufactured by multiple suppliers.
 75 parts identified in initial scope. During the spend analysis I identified an
additional 120 parts to add to the scope.

9. Carbides Manufacturing Strategic Sourcing Project
Post-Sourcing State:
 Through the RFQ process, 2 suppliers were selected to provide
manufacturing for carbide parts to leverage volume for better pricing.
 A savings of 8% was achieved by allocating specific carbide parts to 1 of the
2 suppliers with the most competitive price and lead times.

10. Wireline Pressure Control Equipment (PCE) Strategic
Sourcing Project
Pre-Sourcing State:
 4 incumbent suppliers used.
 Contracts with all suppliers.
 Certain suppliers are only used in specific regions.
 PCE strings are rented on an as needed basis.
 Every job site orders unique specifications for PCE strings.
 At times, PCE strings will sit idle when not being used, yet are still be
charged a daily rate.

11. Wireline Pressure Control Equipment (PCE) Strategic
Sourcing Project
Post-Sourcing State:
 2 supplier selected to support global operations.
 Strategy was rolled out in phases to allow operations to order PCE strings.
 A buy vs. rent analysis was conducted and the findings determined it was
best to continue to rent.
 PCE string specifications were standardized to decrease idle time and
increase utilization across multiple job sites. When on a job site is not using
a PCE string, another job site nearby needing one could request it without
having to order one from the supplier.

12. Michael Keith
PORTFOLIO OF TCO MODELS

13. Laptop TCO Model
Element R/O Measure
Purchase Price:
Equipment O per unit
Software
Annual R Annual per unit
Monthly R Monthly per unit
Tax
Texas Sales Tax O per unit
Freight O
Acquistion Cost:
Procure to Pay (PO to Invoice) O per unit
Imaging O 1 FTE and 1 PTE Annual Salaries
Asset Tagging (Receiving) O Annual Salaries and supplies
Issuing (processing request) O Annual Salaries
Inventory O
Freight (Shipping) O Salaries, supplies and freight
Usage Costs:
Productivity Loss R no cost - loaner issued
Power Consumption R kWhr
Warranty O included in purchase price
Supplier Management R per unit
RFS System O per unit
Main Control R per unit
PC Device Service Rate R a month per unit
End of Life Costs:
Salvage Value O per unit
 First, major cost elements were identified and a measure assigned for each.
 Cost elements were classified as either recurring or one time costs.
 Laptops were used for TCO due to historic and forecasted volumes for laptops compared to desktops.

14. Laptop TCO Model
Element Present Year 1 Year 2 Year 3
Purchase Price:
Equipment $ -
Software
Annual $ - $ - $ -
Monthly $ - $ - $ -
Tax
Texas Sales Tax $ -
Freight
Acquisition Costs:
Procure to Pay $ -
Imaging $ -
Asset Tagging (Receiving) $ -
Issuing (processing request) $ -
Inventory $ -
Freight (Shipping) $ -
Usage Costs:
Productivity Loss
Power Consumption $ - $ - $ -
Warranty
Supplier Management $ - $ - $ -
RFS System $ -
Main Control $ - $ - $ -
PC Device Service Rate $ - $ - $ -
End of Life Costs:
Salvage value $ -
Total $ - $ - $ - $ -
 Second, cost elements were calculated for each lifecycle year per the assigned measure.
 TCO model uses a 3 year lifecycle, which is the term of the enterprise warranty.
 NPV is calculated for each lifecycle year to determine the total TCO for each supplier.

15. Vehicle Rental Management Software TCO Model
Element R/O Measure
Purchase Price:
Software
Rental.NET Initial Investment (up to 8 users) O Per Branch
Hardware
Replacement Credit Card Swipe Readers* O Each
Texas Sales Tax O
Acquistion Cost:
Purchase Order Creation R Each Purchase Order
Invoice Processing R Each Invoice
Usage Costs:
Software
Rental.NET Ongoing Monthly Charge R Monthly/Per Branch
Monthly Per Transaction Fees:
RezCentral - Per Reservation Fee R <= 1000 Reservations/Month
RezCentral - Per Reservation Fee R > 1000 Reservations/Month
End of Life Costs:
Salvage Value O
 First, major cost elements were identified and a measure assigned for each.
 Cost elements were classified as either recurring or one time costs.
 TCO modeled using suppliers proposal.

16. Vehicle Rental Management Software TCO Model
Element 2010-Q4 2014-Q4
Purchase Price:
Software
Rental.NET Initial Investment $ - $ -
Hardware
Replacement Credit Card Swipe Readers*
Texas Sales Tax $ - $ -
Acquisition Costs:
Purchase Order Creation
Invoice Processing
Usage Costs:
Software
Rental.NET Ongoing Monthly Charge $ - $ -
Monthly Per Transaction Fees:
RezCentral - Per Reservation Fee $ - $ -
End of Life Costs:
Salvage value
Total $ - $ -
 Second, cost elements were calculated for each lifecycle quarter and year per the assigned measure.
 TCO model uses a 4 year lifecycle, broken down into quarters.
 NPV is calculated for each lifecycle year to determine the total TCO for each supplier.
 Identified Rental.NET Ongoing Monthly Charge as the major cost driver for this suppliers TCO.
 Negotiated a 19% decrease in Rental.NET Ongoing Monthly Charge , which brought this suppliers TCO
in line with the nearest competitors TCO.

17. General Ledger Reconciliation Software TCO Model
Element R/O Measure
Purchase Price:
Spreadsheet Server for use with Oracle (35 users) O Lump sum (includes volume and year end discount)
Distribution Manager O no charge
10 ad-hoc drill downs O no charge
Texas Sales Tax O
Acquisition Cost:
Negligible
Usage Costs:
Annual Maintenance R % of list price ($89,875)
Texas Sales Tax
End of Life Costs:
Salvage Value O
 First, major cost elements were identified and a measure assigned for each.
 Cost elements were classified as either recurring or one time costs.
 TCO model compared proposals from 3 suppliers to assist stakeholders in selecting a supplier with
the lowest TCO.

18. General Ledger Reconciliation Software TCO Model
Element 2011 2012 2013
Purchase Price:
Spreadsheet Server for use with Oracle (35 users)
Distribution Manager
10 ad-hoc drill downs
Texas Sales Tax
Acquisition Costs:
Negligible
Usage Costs:
Annual Maintenance
Texas Sales Tax
End of Life Costs:
Salvage Value
Total
 Second, cost elements were calculated for each lifecycle quarter and year per the assigned measure.
 TCO model uses a 3 year lifecycle.
 NPV is calculated for each lifecycle year to determine the total TCO for each supplier.
 The supplier that was selected had a TCO 17% lower than the nearest competitors TCO.

19. Michael Keith
PORTFOLIO OF SHOULD COST MODELS

20. Blowout Preventer (BOP) Should Cost Model
BASIC INDUSTRY COST PROFILE - MANUFACTURING
Step 1. Indentification of product code and data sources:
1.1 Identify the industry code (SIC/NAICS) 3533/333132
1.2 Data sources for Material costs US Census Bureau Annual Survey of
Manufactures (ASM)
 The first step in creating a
1.3 Data sources for Labor costs US Census Bureau Annual Survey of
Manufactures (ASM)
should cost model is to build a
1.4 Data sources for financial ratios Risk Management Association (RMA) Basic Industry Cost Profile
(BICP) .
Step 2. Calculation of industry averages:
2.1 Calculate Direct Material (Total cost of = $8,201,642 - $156,284
 This is a BICP for the
materials -[Cost of purchased = $8,045,358 manufacturing industry.
electricity+Cost of purchased fuels])
 The US Census Bureau’s Annual
2.2 Calculate Material as a % of Sales
(Direct Material/Total value of shipments)
=
=
$8,045,358 /
54.4%
$14,796,147
Survey of Manufactures (ASM)
and Risk Management
2.3 Calculate Direct Labor as a % of Sales = $1,368,477 / $14,796,147 Associations Financial Ratio
(Production work er wages/Total value of = 9.2%
shipments) Benchmarks were used to
2.4 Calculate Cost of Goods Sold % (COGS) = 100 - 33.4
construct the BICP.
Using RMA, (Net Sales - Gross Profit +
Depreciation)
= 66.6%
 The next step is to build a
supplier specific should cost
2.5 Calculate Manufacturing Overhead % = 66.6% - 63.6%
(COGS-(Material+Direct Labor)) = 3.0% model, using the BICP as a
guide.
2.6 Determine Profit Before Tax % (PBT) = 8.6%
Use RMA
2.7 Calculate GSA & Other Expenses % (100- = 100% - 75.2%
(COGS%+PBT%)) = 24.8%
Summary of industry averages (figures in %)
A Direct Material 54.4%
B Direct Labor 9.2%
C Manufacturing Overhead 3.0%
D Cost of Goods Sold (A+B+C) 66.6%
E GSA & Other Expenses 14.4%
F Profit Before Tax 19.0%
G Should Cost (D+E+F) 100.0%

21. Blowout Preventer (BOP) Should Cost Model
SHOULD COST MODEL - MANUFACTURING
Step 1. Calculation of Basel Line Cost (Direct Material):
1.1 Break down the Bill of Materials (BOM) 650 lb. Single Ram BOP  The second step is to build a
supplier specific should cost
model.
1.2 Obtain quotes on BOM elements $ 1.38 lb.  The major BOP BOM elements
are identified and priced from
public sources.
1.3 Calculate Direct Material costs = 650 * $ 1.38  Cost of Goods Sold, GS&A, and
= $ 897.00 Additional $150 Profit Before Tax cost elements
$ 1,047.00
were acquired RMA’s Financial
Step 2. Calculation of Should Cost: Benchmark Ratios
2.1 Calculate Should Cost (Direct Material
Cost($)/Direct Material %)
=
=
$ 1,047.00 /
$ 1,925.53
54.4%
 The should cost model was
presented during negotiations
and a 5% price reduction was
Step 3. Develop Cost Breakdown:
3.1 Breakdown the Should Cost based on industry
received from the suppliers
percentages calculated. See table below. proposed pricing.
Basic Product Should Cost Model
NAICS CODE 333132: MANUFACTURING
Element $ % Source
A Direct Material $ 1,047 #1 Iron Chicago Exchange
Direct Labor $ 5,370 US Census Bureau Annual
Survey of Manufactures (ASM),
B 63.6% Cromar Tour
C Manufacturing Overhead $ 303 3.0% COGS-(DM+DL)
D Cost of Goods Sold $ 6,719 66.6% RMA
E GSA & Other Expenses $ 1,453 14.4% RMA
F Profit Before Tax $ 1,918 19.0% RMA
G Should Cost $ 10,092 100.0%

22. Laptop Should Cost Model
BASIC INDUSTRY COST PROFILE - COMPUTER MANUFACTURING
Step 1. Indentification of product code and data sources:
1.1 Identify the industry code (SIC/NAICS) 3571/334111
1.2 Data sources for Material costs US Census Bureau Annual Survey
of Manufactures (ASM)
 The first step in creating a
1.3 Data sources for Labor costs US Census Bureau Annual Survey
of Manufactures (ASM)
should cost model is to build a
1.4 Data sources for financial ratios Risk Management Association Basic Industry Cost Profile
(RMA)
(BICP).
Step 2. Calculation of industry averages:
2.1 Calculate Direct Material (Total cost of = $19,487,782 - $51,238
 This is a BICP for the computer
materials -[Cost of purchased = $19,436,544 manufacturing industry.
electricity+Cost of purchased fuels])
 The US Census Bureau’s Annual
2.2 Calculate Material as a % of Sales
(Direct Material/Total value of shipments)
=
=
$19,436,544
45.7%
/ $42,507,682
Survey of Manufactures (ASM)
and Risk Management
2.3 Calculate Direct Labor as a % of Sales = $490,717 / $42,507,682 Associations Financial Ratio
(Production work er wages/Total value of = 1.2%
shipments) Benchmarks were used to
2.4 Calculate Cost of Goods Sold % (COGS) = 100 - 25.4
construct the BICP.
Using RMA, (Net Sales - Gross Profit +
Depreciation)
= 74.6%
 The next step is to build a
supplier specific should cost
2.5 Calculate Manufacturing Overhead % = 74.6% - 46.9%
(COGS-(Material+Direct Labor)) = 27.7% model, using the BICP as a
guide.
2.6 Determine Profit Before Tax % (PBT) = 1.7%
Use RMA
2.7 Calculate GSA & Other Expenses % (100- = 100% - 76.3%
(COGS%+PBT%)) = 23.7%
Summary of industry averages (figures in %)
A Direct Material 45.7%
B Direct Labor 1.2%
C Manufacturing Overhead 27.7%
D Cost of Goods Sold (A+B+C) 74.6%
E GSA & Other Expenses 23.7%
F Profit Before Tax 1.7%
G Should Cost (D+E+F) 100.0%

23. Laptop Should Cost Model
LAPTOP SHOULD COST MODEL - COMPUTER MANUFACTURING
Step 1. Calculation of Base Line Cost (Direct Material):
1.1 Break down the Bill of Materials (BOM)
Display  The second step is to build a
Chassis
Keyboard supplier specific should cost
Motherboard
Hard Drive model.
Memory
Processor
 The major laptop BOM elements
are identified and priced from
1.2 Obtain quotes on BOM elements Cost Source
Display http://www.sparepartswarehouse.com/ public sources.
Chassis
$
$
197.00
30.00
OEM,Laptop,Part,446435001.aspx
 Cost of Goods Sold, GS&A, and
Keyboard
Motherboard
$
$
55.00
53.99
http://laptopparts.vivotechnology.net/
newegg.com
Profit Before Tax cost elements
Hard Drive $ 54.99 newegg.com were acquired from the
Memory $ 38.99 newegg.com
Processor $ 249.00 newegg.com suppliers annual report.
Other
 The should cost model was
1.3 Calculate Direct Material costs = $ 509.23 presented during negotiations
and a 7% price reduction was
Step 2. Calculation of Should Cost: received from the suppliers
2.1 Calculate Should Cost (Direct Material Cost($)/Direct
Material %)
=
=
$
$
509.23 /
771.56
66.0%
proposed pricing.
Step 3. Develop Cost Breakdown:
3.1 Breakdown the Should Cost based on industry
percentages calculated. See table below.
Basic Product Should Cost Model
NAICS CODE 333132: MANUFACTURING
Element $ % Source
A Direct Material $ 509.23 66% COGS-MO-DL
B Direct Labor $ 15.43 2% CostModeler Light
C Manufacturing Overhead $ 54.01 7% CostModeler Light
D Cost of Goods Sold $ 578.67 75% HP 2007 Annual Report
E GSA & Other Expenses $ 108.02 14% HP 2007 Annual Report
F Profit Before Tax $ 84.06 11% HP 2007 Annual Report
G Should Cost $ 771.56 100% HP 2007 Annual Report

24. Contact Information
 Email: bbascm@yahoo.com
 Phone: 281-781-2753