Case – SafeBlend Fracturing

1. Describe the nature of the sourcing teams (those responsible for making purchase decisions of fracturing fluid) at BNG. * What is the team’s purpose (short and long term)? * Who are the key members of the team? * Who on the team wields the most power and the least power? Why? * Does this sourcing team provide SafeBlend with opportunities? Why or why not?
The sourcing team comprised of adequate representation of key stakeholders in the company. It consisted of a few chemists and engineers, but mostly strategic leaders, who were responsible for making the purchase decisions of additive for fracturing fluid. The SafeBlend worked directly with sourcing managers at each company.
Team Structure and roles * Sourcing Managers: Negotiated directly with SafeBlend. The sourcing managers assessed costs based on current market rates for ingredients and processes, and then assigned a value to the final product. They also relied on intelligence from their chemical engineers. * Chemical engineers: Worked with Dudley and SafeBlend to place a value on proprietary chemical processes, which included ingredients, equipment, labor, and innovation. Engineers played less significant role in final decision making process. * VP of Strategy: The VP considered the longer-term strategic benefits of a relationship with SafeBlend and owned the most power. Ultimately, the decision rested with VP of Strategy.
The BNG’s sourcing team’s short term goal was to gain protection against the lawsuit that was filed against them for contaminating the environment with chemicals from fracturing liquid, and BNG was willing to pay even a high rate to prevent negative publicity and financial liability should they lose the case. In long term, they were ready to explore alternatives to SafeBlend’s “green” solution and re-negotiate with SafeBlend to