A SmartBuyer energy specialist implemented flexible energy procurement strategies for high-usage manufacturers, working alongside their teams to buy against the market rather than on fixed rates, and cutting energy costs materially.
energy cost reduction
CLIENT
High-usage
manufacturers
CATEGORY
Energy
SPECIALIST
Flexible
energy procurement
OUTCOME
Material
cost reduction
A fixed-rate energy contract looks safe, but the supplier prices in the risk it takes on. The rate reflects wholesale prices on the day of signing plus a premium for carrying the volume, and the buyer pays that premium whether the market later rises or falls. For a high-usage site, even a small gap in the unit price runs across a very large volume.
Buying flexibly reduces that premium but moves the risk to the buyer. Someone must decide when to buy, how much to fix at each point and what the business can tolerate if prices move against it. That is a trading judgement, and a manufacturer’s finance and operations teams are rarely set up to make it against a live market.
High-usage manufacturers for whom energy is among the largest and most volatile costs, buying on fixed rates rather than against the market, with each business carrying a different tolerance for price movement.
Client identity not disclosed.
Before anything changed in how energy was bought, the specialist agreed with each manufacturer’s team how much price risk it could carry.
ASSESS
Establish usage and risk tolerance
Analysed each manufacturer’s consumption pattern and agreed its tolerance for price movement, because the share of volume bought early or left open depends on how far the budget can absorb a rise.
STRUCTURE
Build the flexible strategy
Set a purchasing policy defining how much volume to fix, when to buy and which price levels trigger action, so each decision followed agreed rules rather than a view taken under pressure.
BUY
Buy in stages against the market
Placed purchases in tranches across the market under that policy, spreading the timing risk, and matched each tranche to the manufacturer’s consumption pattern so the position tracked actual need and not a forecast.
Material
Energy costs were cut materially for the high-usage manufacturers, measured against the fixed-rate position they had held, which the flexible strategy replaced.
Price exposure is now a choice the manufacturers make deliberately, through a written policy, rather than something that came with the contract.
Finance and Operations can see how much volume is fixed, how much is open and what that means for the budget, instead of reading a single contract rate.
Matching the strategy to risk appetite
A flexible strategy is only as good as the risk the business can hold. Too little flexibility keeps the fixed-rate premium; too much exposes a manufacturer’s budget to a price spike. The specialist therefore set the balance separately for each manufacturer, from its own usage and tolerance. The trade-off was cost against budget certainty, and the manufacturer, not the market, decided where to sit.
Staged buying under a written policy
Staged purchases only help if someone is accountable for acting on the policy; without an owner, flexible buying drifts back into a passive position that looks much like a fixed rate. A fixed rate is itself a trading position, only one nobody chose on purpose, so it needs a policy and an owner like any other.
Complete
Complete
Complete
Specialist support without a permanent hire
SmartBuyer matches organisations with experienced specialists across 250+ categories, giving budget owners access to focused energy procurement expertise exactly when the work demands it.
500+
specialists
Experienced category specialists who have run flexible energy procurement for high-usage manufacturers and other energy-intensive operations.
250+
categories
Focused coverage across energy, utilities and the wider operational spend base, matched to the usage in hand.
Flexible
engagement
Specialist cover to build and run an energy strategy or a wider category, scoped and costed before any work begins, with no permanent hire.