Two Leading Energy Companies Realize M&A Synergy Targets Through Supply Chain Optimization

Two prominent downstream energy companies in the U.S. merged to form an industry leader with diversified assets across petroleum, refinery, asphalt, and renewable fuel. Following the merger, the newly formed company sought to achieve its synergy targets and optimize its supply chain operations. Specifically, the company wanted to consolidate its Maintenance, Repair, and Operations (MRO) supplier base, gain a comprehensive understanding of its MRO spend profile, and realize strategic savings. To meet these goals, the company engaged Metasys to guide them through the process and deliver on their synergy targets.

Metasys implemented a three-step process to help the newly merged entity achieve its objectives:

1. MRO Supplier and Spend Baseline: Metasys applied a clean-sheet methodology to define the characteristics of an MRO supplier. With this definition in place, we accurately classified and categorized all MRO suppliers between the two merging companies, identifying both common and divergent suppliers.
2. Supplier Database Creation: Using the categorized supplier list, Metasys established a comprehensive supplier database, gathering detailed information such as item specifics, pricing, contract terms, and discount frameworks for each supplier.
3. Benchmarking Analysis: We enriched the supplier database with competitive market data to identify maximum savings opportunities, while aligning with the company's unique business requirements.

Metasys helped the newly merged company identify nine MRO supplier categories with significant savings potential out of a total supplier spend of $3M. Metasys helped the company realize 10% cost savings. Additionally, Metasys developed a scenario-based framework that outlines action steps to continuously achieve further cost savings and supplier rationalization moving forward.