Metso Minerals (part of the Metso Group) is the world's market leader in rock and mineral processing equipment with a turnover of approximately €1.5b per year. Steel castings is one of the largest spend category currently sourced globally across the 5 continents. In order to rebalance a growing country risk as well as identify new cost reduction opportunities, Metso Minerals looked at China as a long term strategic source of supply for its large steel castings requirements.

• Selected steel castings part numbers representative of Metso's total steel castings spend
• Segmented the sample set into 9 bidding packages
• Qualified through an RFI process 17 Chinese suppliers capable of responding to Metso's requirements
• Run RFQ process with short listed suppliers to measure competitiveness of Chinese suppliers vs. current sources
• Developed detailed steel castings cost model of Chinese suppliers to confirm reliability of RFQ process
• Calculated total costs of delivery from ex-works China to Metso factories
• Develop business case for moving an increased volume of steel castings to China

• Identified 20% factor cost advantage for China vs. current LCC sources, mostly driven by advantages in labor and energy
• Evaluated medium to longer term risk of moving to China (currency, materials and energy shortages)
• Made recommendation for moving approximately 25% of the global steel castings spend to China with associated business case
• Developed implementation plan for re-sourcing initiative
• Proposed program governance structure for completing process over 18 months period