© 2010 Dragon Sourcing. All rights reserved.
Kitchenware for Brazil Case Study
May 2010
Dragon Sourcing - 龙 源 Your Tailored Sourcing Approach to Asia
© 2010 Dragon Sourcing. All rights reserved.
Agenda
1. Our offerings and approach
2. Case Study: Lock Lids
3. Client & DS Partnership
© 2010 Dragon Sourcing. All rights reserved.
Company Introduction
• The Client is a South American based division of a French multinational in the glass manufacturing industry. This multinational has become a market leader in several industrial branches, and is among the 100 largest industrial companies in the world.
• In the spring of 2009, their purchasing group approached Dragon Sourcing to embark on a spot-sourcing initiative in China to procure several kitchenware items to complement its existing product line. As a result of this first successful experience buying from China, the Client has decided to embark on a long-term partnership with Dragon Sourcing in order to pursue new sourcing activities with a larger number of product categories.
© 2010 Dragon Sourcing. All rights reserved.
• Shortlist suppliers based on RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample development process
• Manage sample development process
• Conduct final negotiations and select suppliers
• Finalise Contract
• Analyse spend category in detail– Specifications and quality
requirements– Volumes– Deadlines
• Analyse supply market and identify potential suppliers
• Pre-qualify potential suppliers through an RFI process
• Manage RFP process with pre-qualified suppliers
• Analyse supplier responses and calculate fully delivered price (logistics, import duties,..)
• Develop Business case and implementation plan
Dragon Sourcing service offering covers the end-to-end sourcing process
Feasibility Analysis Supplier Selection and Contracting Procurement Operations
• Manage P/O and agree payment terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Key
act
iviti
es
© 2010 Dragon Sourcing. All rights reserved.
Agenda
1. Our offerings and approach
2. Case Study: Lock Lids
3. Client & DS Partnership
© 2010 Dragon Sourcing. All rights reserved.
• Manage P/O and agree payment terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
• Shortlist suppliers based on RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample development process
• Manage sample development process
• Conduct final negotiations and select suppliers
• Finalise Contract
• Analyse spend category in detail– Specifications and quality
requirements– Volumes– Deadlines
• Analyse supply market and identify potential suppliers
• Pre-qualify potential suppliers through an RFI process
• Manage RFP process with pre-qualified suppliers
• Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)
• Develop Business case and implementation plan
© 2010 Dragon Sourcing. All rights reserved.
Feasibility Analysis Supplier Selection and Contracting Procurement Operations
Key
act
iviti
es
Dragon Sourcing service offering covers the end-to-end sourcing process
© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.
The first step is to develop a comprehensive understanding of the need and of the functional requirements
Product Name Set of 3 PP Lock Lids Product Picture
Yearly Quantity 100,000 ~ 200,000 pcs of each
Quotation FOB Price
Sizes
Small bowl 0.5 L
Medium bowl 1 L
Big bowl 2 L
Color Lid: Transparent Silicone ring: color TBDReceived Client QC specs
Description LogoLeak seal
Packaging Bulk Packaging
HS Code 39241000
© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.
Then, an RFI/RFP process is administered to filter out most capable suppliers
Request For Information 征询单Confidential 保密
To 收件人:Email 电子邮件:Tel number 电话:Mobile 手提电话Fax number 传真:
SUPPLIER NAME 公司名称
Adress 地址- 街道City 城市Province 省Zip code 邮政编码Contact person 联系人Job title 头衔email 电子邮件Phone number 电话Fax number 传真Website 网址
Which year was your company founded?贵司是在哪一年成立的?Ownership所有权Capital in million RMB固定资产(百万人民币)What is the workfloor size (m²)?贵司工厂面积有多少平方米?How many employees do you have?贵司员工总数有多少?Do you have a good English speaker and writer in your factory?(Y/N)贵司是否有可用英语进行书面及口语交流的人员?(是/否)How many years have you been in the PP trolley suitcasebusiness?
PP贵司从事 拉杆旅行箱生产有多少年?Do you have an export license ?是否持有进出口许可证 ?
Europe USA Others% of turnover exported to出口占销售百分比
CONTACT DETAILS INFORMATION 联系方式
GENERAL INFORMATION 概况
DRAGON SOURCING 龙源有限公司上海代表处Rachel Yao 姚瑛莹
[email protected] - 6141 3974
021 - 6141 3966159 00 89 89 18
BUSINESS INFORMATION 公司规模
Product Name Quantity Material Size Color Accessory Packaging Carton Size (L×W×H)
产品名 需求量 材料 尺寸 颜色 附件 包装 纸板箱尺寸
Set 1:
Set 2:
Set 3:
Set of 3 PPtrolley suitcasesPP聚丙烯手推旅行箱3件套
9000套(3件套)
General Information 概述
Product Name Quantity Gross weight percarton(in kg)
Total No.ofset/20'container
Total No.ofset/40'container
Product Size Sample Charge inUS$
EXW US$ price per set FOB US$ price perset
FOB port Delivery Time Payment Term
产品名 需求量 /毛重 箱(公斤) 20尺柜的装箱量 40尺柜的装箱量 产品尺寸 ( )样品费 美元 ( )出厂美元单价 一套FOB 美元单价(一套)
FOB港口 交货时间 付款条件
Set 1:
Set 2:
Set 3:
Logistics Information 物流信息
Set of 3 PPtrolley suitcasesPP聚丙烯手推旅行箱3件套
9000套(3件套)
Contact detailinformation
Businessinformation
Product and priceinformation
Logisticsinformation
Designinformation
© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.
Non-food Project Control Sheet - PP Trolley
RFPSent
1stFollow
Up
2ndFollow
Up
SupplierName City Re-
gion Date Date Date Date Remark Equivalentproduct
FOB US$Small
FOB US$Middle
FOB US$Large
FOB US$per set
FOBPort
SampleCharge per
set
Production Lead
Time
Supplier 1 Shen-zhen
Guang-dong 21-Nov N/A N/A 20-Nov very professional and
spontaneous 20-Nov US$5.40 US$7.60 US$9.00 US$20.00 Shen-zhen US$50.00 15th
Feb.07
Supplier 2 Wen-lin
Zhe-jiang 17-Nov 20-Nov 21-Nov 20-Nov
Professional supplier,with a competitiveprice; cooperative
20-Nov US$6.48 US$9.12 US$10.80 US$24.00 Ning-bo US$100.00 60-90
days
Supplier 3 Shen-zhen
Guang-dong 17-Nov 18-Nov 18-Nov very professional and
spontaneous 18-Nov US$6.75 US$9.50 US$11.25 US$25.00 Shen-zhen US$100.00 45 days
Supplier 4 De-qing
Zhe-jiang 17-Nov 20-Nov 22-Nov good supplier,
supportive; 22-Nov US$7.02 US$9.88 US$11.70 US$26.00 Ning-bo US$50.00 85 days
Supplier 5 Rui-an Zhe-jiang 17-Nov 20-Nov 21-Nov 20-Nov Missing information
received by 22-Nov 4-Dec US$6.21 US$8.74 US$10.35 US$23.00 Ning-bo US$100.00 45 days
Supplier ContactInformation RFP ReceivedIntend to Respond
Received
During the tender process, the suppliers’ willingness to collaborate and to provide complete and accurate information is also assessed
Lock Lid Project – Control Sheet
© 2010 Dragon Sourcing. All rights reserved.
Following a RFI/RFQ screening process,7 suppliers have completed RFI.Which 5 suppliers have offered both design and quotation
35
27
62 2 1
9
9
7
5 5 5
0
5
10
15
20
25
30
35
40
45
50
Identified Suppliers Sent RFI/RFQ Intent to Respond Responded to RFI Respnded to RFQ Lid Designs
New Suppliers Trip Suppliers
Selection of potential suppliers
Pre-selected suppliers
Intent to cooperate
Reception of RFI/RFQ &
Design
41
30
5
11
7 7 6
© 2010 Dragon Sourcing. All rights reserved.
• Shortlist suppliers based on RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample development process
• Manage sample development process
• Conduct final negotiations and select suppliers
• Finalise Contract
• Manage P/O and agree payment terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
• Analyse spend category in detail– Specifications and quality
requirements– Volumes– Deadlines
• Analyse supply market and identify potential suppliers
• Pre-qualify potential suppliers through an RFI process
• Manage RFP process with pre-qualified suppliers
• Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)
• Develop Business case and implementation plan
© 2010 Dragon Sourcing. All rights reserved.
Feasibility Analysis Supplier Selection and Contracting Procurement Operations
Key
act
iviti
es
Dragon Sourcing service offering covers the end-to-end sourcing process
© 2010 Dragon Sourcing. All rights reserved.© 2009 Dragon Sourcing. All rights reserved.
The supplier selection relies on the short-listed suppliers’ offers, company background and quality of design
2 suppliers out of 6 were selected for the
sampling stage
Suppliers’ quotation
Received Designs
Suppliers’ Profile
© 2010 Dragon Sourcing. All rights reserved.
First Sample Second Sample
Sampling Process is recommended to make sure the supplier can make compliant products
Supplier A
Supplier B
Final Supplier
Design Stage
© 2010 Dragon Sourcing. All rights reserved.
• Shortlist suppliers based on RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample development process
• Manage sample development process
• Conduct final negotiations and select suppliers
• Finalise Contract
• Analyse spend category in detail– Specifications and quality
requirements– Volumes– Deadlines
• Analyse supply market and identify potential suppliers
• Pre-qualify potential suppliers through an RFI process
• Manage RFP process with pre-qualified suppliers
• Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)
• Develop Business case and implementation plan
© 2010 Dragon Sourcing. All rights reserved.
Feasibility Analysis Supplier Selection and Contracting Procurement Operations
• Manage P/O and agree payment terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Key
act
iviti
es
Dragon Sourcing service offering covers the end-to-end sourcing process
© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.
Production plan is built to monitor the order and to schedule timely quality inspections
• Based on the claimed production capacity, Dragon Sourcing and supplier agrees on the production schedule
• Sampling and criteria requirements are detailed in a specific document for customer approval. DS sends the criteria list to the supplier for approval.
• 3rd party QC company is contracted to perform:• Early Production QC (~10%)• End of Production QC (~80-90%)• Container Loading Check
• Inspections are documented in a report submitted to customer
© 2010 Dragon Sourcing. All rights reserved.© 2009 Dragon Sourcing. All rights reserved.
QC Reports provide detailed information concerning production quality. Action plans are defined in order to improve product quality
© 2010 Dragon Sourcing. All rights reserved.
Pictures of Defective
© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.
Supplier performance is closely monitored in order to manage the supplier for continuous improvement
• Shipment follow-up document is created to track the supplier’s performance in terms of:
• Timeliness of the delivery• PO qty vs. actual qty• QC inspection results
© 2010 Dragon Sourcing. All rights reserved.
Agenda
1. Our offerings and approach
2. Case Study: Lock Lids
3. Client & DS Partnership
© 2010 Dragon Sourcing. All rights reserved.
The Dragon Sourcing and Client partnership can be represented in 5 stages
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
© 2010 Dragon Sourcing. All rights reserved.
The DS and Client partnership dates back from May 2009
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
Assessment of China’s Kitchenware Supplier Market10 factories in 4 days, focused on:
– Plastic Lid– Kitchenware acessories– Opal plate– Ceramics– Gift Box
Assessment of China’s Kitchenware Supplier Market 10 factories in 4 days, focused on:
– Plastic Lid– Kitchenware accessories– Opal plate– Ceramics– Gift Box
© 2010 Dragon Sourcing. All rights reserved.
Stage 2: Spot Sourcing plan was assigned to DS in June 2009
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
Shipment History– Lasagna Lid –PO Value: 300,000 USD – 9 40’ containers– Spatula –PO Value: 215,000 USD – 1 20’ container
DS Responsibilities– Identify potential suppliers– Manage sampling process– Final negotiations– Track production– Define QC Criteria List– Schedule Quality Control inspections– Coordinate shipments between supplier, freight forwarder and SG
Other sourcing activities:– Opal Plate: quotation & sampling stage– Metal tong: quotation & sampling stage– Whisk: quotation & sampling stage– Tableware lids: quotation & 2 rounds sampling stage– Paper packaging: quotation stage
© 2010 Dragon Sourcing. All rights reserved.
Stage 3: In September 2009, DS became Client’s buying office in China
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
Shipment History– Lasagna Lid: PO Value: 400,000 USD – 11 40’ containers
Attend Sourcing Fairs – October 2009: 3 fairs: Mega Show, Global Sourcing & Canton Fair
• Tableware Glassware: Opal & Tempered• Lids• Accessories: Silicone, Utensils, Spatula set, Fire torch• Others: Paper display, packaging, other glassware
– April 2010: Canton Fair• Silicone set• Plastic Lids• Opal Plate• Tempered Glass tableware - Ambar
Sourcing Activities– Lock Lid: 2 rounds of sampling, choose final supplier, final design phase– Silicone set: sampling stage– Lids: sampling and quotation request phase– Sugar Bowls: collected samples and quotation– Safety Boots: Awaiting specs– Ambar plates: Awaiting specs– Opal Plate: Continuing supplier follow-up
© 2010 Dragon Sourcing. All rights reserved.
In May 2010, the client invited DS’ Account Manager to Brazil in order to help develop a long-term sourcing plan
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
Purpose of the visit to integrate Dragon Sourcing with client’s strategic sourcing strategy.
HOW?
DS creating a cross-functional bond with client’s departments: purchasing, marketing, logistics, quality, engineering…
DS understanding the South-American markets
The benefits:
Dragon Souring to provide new product suggestions from the Chinese supplier base.
Accelerate the product development process, hence decrease the time to market process
© 2010 Dragon Sourcing. All rights reserved.
DS and Client processes are more in
4 Day Supplier Visit
Spot Sourcing
Operational Buying Office
DS & Client Integration
Strategic Buying Office
Dragon Sourcing is closely integrated within the company and communicates daily with a number of their departments: Purchasing, Marketing and Quality Assurance
Dragon Sourcing can begin looking for purchase goods from other LCCs like India, Vietnam and Cambodia.
Promote the strength of the Client’s brands to the supply base so they can offer their new product ideas to us.
Continue to build the supplier base and the range of product categories.