Bethlehem Steel

Bethlehem Case Study

PARTNERSHIPS WITH SUPPLIERS While we seek a mutually beneficial relationship with all suppliers, we reserve the term “partnership” for those special relationships characterized by: • Joint commitment to information exchange, planning, continuous improvement and cost reduction. • Agreed-upon measures of key performance factors • Sharing of risk to achieve mutual benefits • The suppliers maintaining a leadership position in technology, service and cost, and Bethlehem maintaining a receptive attitude to the supplier’s ideas. • Appropriate consideration for the amount of business we direct to that supplier.

Where The Partnership Began

14 Months

Bethlehem Steel Sparrows Point Facility Case Study Operating Budget Under Management by Partnership

$19.5 Million PROFIT SHARING PERIOD (50/50 Partnership) ( 3 Months )

( 3 Months )

( 36 Months )

Analysis & Engineering

Implementation

On-Going Implementation/Capital Project Development

( Energy Pro- USA Investment )

Contract #1

$6.5 Million

8.1% Savings of Managed Budget For Electricity of $30 Million per Year and Natural Gas of $48 Million per Year

Contract #2

$3.6 Million

10.4% Added Revenue From Managed Budget For Blast Furnace Gas of $34.6 Million per Year **

No productivity or environmental benefits factored ** Based on 1998 blast furnace gas usage

Staffing Plan for Bethlehem Steel- $650M Energy Budget