German auto part manufacturer savings €90,000 on natural gas costs by implement NUS risk-managed purchases strategy.
A global German automotive parts manufacturer specializing in plastic body parts engaged NUS Consulting Group's German office to develop and implement strategies to control and reduce its natural gas cost. For this manufacturer, natural gas represented a significant cost factor as its processes require heat to shape and model plastic.
Prior to engaging NUS, the manufacturer typically purchased its natural gas on fixed-price contracts. The client did not have internal procurement expertise specializing in European and German natural gas markets.
Initially, the NUS team reviewed the client's historical interval metering data to develop a detailed profile of the site's usage. The analysis determined that the client effectively ran the sites continuously – seven days per week and three shifts per day. Consequently, the NUS team determined the client would benefit from a risk management portfolio purchasing strategy, integrating spot purchases for a certain portion of its requirements.
After detailing the plan to the client's stakeholders and explaining how purchases would be undertaken to cover future periods (months, quarters, years) using pricing triggers and unhedged portions would be automatically balanced on the spot market. The client agreed to implement the purchasing strategy.
The NUS drafted a strategic energy purchasing management plan (SERMP), secured a necessary supply contract for the client, and began monitoring pricing the market. As a result of implementing this strategy, the client saved in excess of €90,000 against its fixed-price purchasing strategy.
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