The Strategic Heatwave: EECL’s Makeor-Buy Crossroad
Rishabh Chandnani and Amol S. Dhaigude
S. P. Jain Institute of Management and Research, Bhavan’s Campus, Mumbai, India
Volume 19: 2025, pp. 75-110; ABSTRACT
In June 2022, Embryo Engineering and Construction Limited (EECL), a leading EPC contractor in the oil and gas sector, confronted a
high-stakes make-or-buy decision that threatened its financial stability and reputation. Persistent delays and cost overruns in
outsourced fired heater packages, critical components in refinery projects, had triggered liquidated damages, declining margins,
and growing client dissatisfaction. Mr. Singhania, EECL’s Operations Head, had to decide whether to continue outsourcing to
underperforming vendors or bring execution in-house through a sister company, balancing potential 8% cost savings against
capability gaps, transition risks, and tight project deadlines. The case integrates financial analysis, risk-adjusted NPV,
vendor performance benchmarking, and capability assessment to evaluate the trade-offs between cost efficiency, execution
control, and long-term strategic positioning. It enables students to apply transaction cost economics, strategic sourcing,
and risk management frameworks to a real-world, time-sensitive decision in project-based in projectbased industries.
Keywords: operations management teaching, make-or-buy dilemma, EPC contracts, risk assessment, sourcing strategy, capability development.
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