Your Tailored Sourcing Approach to Low Cost Countries
Aluminum die-casting case study
Demand Analysis: heating block and meat mincer Item description
Qty per annum (in units)
Current US$ FOB purchasing price
Meat mincer in aluminum
150,000
US$ X.XX
Heating block in aluminum
500,000
US$X.XX
Product picture
Project approach Steps
April W1
3
1
Collect detailed spend information about the category such as technical requirements, standards applied, material specification, drawings, pictures, consolidated volume by consuming factories, and current unit prices
2
Collect one representative sample of the products to be sourced in our Shanghai, HCMC, Mumbai and Istanbul offices
3
Identify list of potential suppliers in Vietnam, Thailand, Indonesia, China and Turkey to include in the RFI / RFQ process
4
Develop the RFI / RFQ to include all key supplier qualification criteria (e.g.: financial, technology, manufacturing capability, corporate responsibility, quality‌) and quotation requirements
5
Administer the RFI / RFQ process
6
Analyze responses and use balance score carding process together with management team to rank suppliers and recommend suppliers which client needs to take through a formal qualification process
7
Jointly develop with our client the structure of the audit report
8
Carry out audits (either alone or jointly with clients auditors or buyers) for the short listed suppliers that appear attractive and competitive based on RFI/RFQ process
9
Issue audit reports and rank suppliers based on audit and price competitiveness
10
Recommend which suppliers to move to sample development stage and manage sample development stage
11
Based on sample quality select suppliers with who to enter into final contract negotiations and support the contract negotiation process
May W2
W3
W4
June W5
W6
W7
W8
July W9
W10
W11
W12
W13
W14
Phase 2: Supplier qualification (Optional) SCHEDULE TO BE DEFINED
Not-started
Started
Delayed
Finished
Milestones
We identified 346 suppliers in China, Thailand, Indonesia, Vietnam and Turkey and received 27 RFI/RFQs
RFI-RFQ sent
29
Intend to respond
Intend to respond received CN 11 THAI 4 IN 3 VN 4 TUR 7
14
RFI-RFQ received
4
Only RFI received CN 3 THAI 2 IN 1 VN 2 TUR 6
Suppliers initially identified CN 173 THAI 51 IN 40 VN 35 TUR 47
346
RFI-RFQ sent CN 113 THAI 45 IN 36 VN 19 TUR 32
245
197
19 Not Confirmed yet CN 14 THAI 0 IN 5 VN 0 TUR 0
13 RFI and RFQ received CN 8 THAI 2 IN 2 VN 1 TUR 0
Give up CN 88 THAI 41 IN 28 VN 15 TUR 25
2 Not received yet CN 0 THAI 0 IN 0 VN 1 TUR 1
Reasons for not participating in the RFI-RFQ: Reasons for not participate
Not sent RFI/RFQ
Don't intend to respond
5
China
Thailand
Indonesia
Viet Nam
Turkey
Total
Percentage
Contact detail not valid
22
2
0
4
15
43
43%
Only produce stamping or plastic ; focus on one Industry like automotive ;produce other metal products not alu
27
2
2
12
0
43
43%
Not interested in the project
9
0
0
0
0
9
8%
Trading company
2
0
1
0
0
3
3%
Focus on domestic market
0
1
1
0
0
2
2%
Others
0
1
0
0
0
1
1%
Sub Total
60
6
4
16
15
101
100%
Can not produce ; the products are complex; focus on other industry
44
24
18
1
6
93
47%
RFI is too complex; not interested in the project
34
9
5
2
19
69
35%
Can produce but don’t think they can meet client strict requirements
2
0
0
9
0
11
5%
Have submitted quotes to client earlier several times
0
0
1
0
0
1
1%
client’s current supplier
1
0
0
0
0
1
1%
Others
7
8
4
3
0
22
11%
Sub Total
88
41
28
15
25
197
100%
148
47
32
31
40
298
-
Total
China: We have received RFI/RFQ from 11 Chinese suppliers
No.
Supplier Name
Website
CECED/ Confidential RFI/RFQ letter GC Received received received (Y/N) (Y/N) (Y/N)
Province
City
1
Zhejiang
Ningbo
Both Y
Y
Y
2
Zhejiang
Ningbo
Both Y
Y
Y
3
Zhejiang
Ningbo
Both Y
Y
Y
4
Zhejiang
Ningbo
Only RFI
N
N
5
Zhejiang
Ningbo
Both Y
Y
Y
6
Zhejiang
Taizhou
Both Y
Y
Y
7
Jiangsu
Nanjing
Both Y
Y
Y
8
Jiangsu
Yixing
Both Y
Y
N
9
Jia ngsu
Suzhou
Only RFI
N
N
10
Guangdong
Foshan
Both Y
N
N
Heilongjiang
Jilin
Neimongu
Gansu
11
Shandong
Qingdao
Only RFI
N
Liaoning
Beijing
Ningxia Gansu
Tianjin Hebei Shanxi
Shaanxi
Henan Hubei
Sichuan
Hunan Guizhou
N
Yunan
Shandong Jiangsu Anhui
Shanghai
Zhejiang
Jiangxi Fuji an
Guangxi Guangdong Taiwan
6
Thailand: We have received RFI/RFQ from 4 suppliers
No.
7
Supplier Name
Website
CECED/ Confidential RFI/RFQ letter GC Received received received (Y/N) (Y/N) (Y/N)
Province
City
1
Nakornprathom
Aomyai
Both Y
Y
Y
2
Bangkok
Bangkok
Only RFI
Y
Y
3
Bangkok
Bangkok
Only RFI
N
N
4
Samut Sakorn
Amphur Muang
Both Y
N
Y
Indonesia: We have received RFI/RFQ from 3 suppliers
No.
Supplier Name
Province
City
1
West Java
Tangerang
2
West Java
Tangerang
3
West Java
Bekasi
RFI/RFQ Received (Y/N)
Website
Both Y
Y
Y
-
Both Y
Y
Y
-
Only RFI
N
N
Tangerang
8
CECED/ Confidential GC received letter received (Y/N) (Y/N)
Bekasi, Bandung, Karawang Timur, Karawang Barat
Vietnam: We have received RFI/RFQ from 3 suppliers
No.
Supplier Name
Website
RFI/RFQ Received (Y/N)
Confidential CECED/ letter GC received received (Y/N) (Y/N)
Province
City
1
Dong Nai
Bien Hoa
Only FRI
N
Y
2
HCM City
HCM City
Both Y
Y
Y
3
HCM City
HCM City
Only RFI
N
N
HCM City Dong Nai
9
Turkey: We have received RFI from 7 suppliers
No.
10
Supplier Name
Website
RFI/RFQ Received (Y/N)
CECED/ GC received (Y/N)
Confidential letter received (Y/N)
Province
City
1
MARMARA REGION
BURSA
Only RFI
N
N
2
MARMARA REGION
BURSA
Only RFI
N
N
3
MARMARA REGION
ISTANBUL
Only RFI
N
N
4
MARMARA REGION
ISTANBUL
Only RFI
N
N
5
MARMARA REGION
IZMIR
Not received yet
N
N
6
MARMARA REGION
KOCAELI
Only RFI
N
N
7
MARMARA REGION
KOCAELI
Only RFI
N
N
RFI score sum up for 9 Chinese suppliers according to the scoring category
Remark: -The Chart’s legend is ordered by the ranking of the RFI score. -We remove the score of “corporate responsibility” and split into other categories -We indicate the highest and lowest score on the chart to see the gap among suppliers and we found the gap between highest and lowest score on each category are quite big even more than 50%.
11
RFI score sum up for 4 Thailand suppliers according to the scoring category
12
RFI score sum up for 3 Indonesia suppliers according to the scoring category
13
RFI score sum up for 3 Vietnam suppliers according to the scoring category
14
RFI score sum up for 6 Turkey suppliers according to the scoring category
15
Average score for each country
Remark: -We use the same tool to scoring the 5 countries’ suppliers. -The average score of China is the highest 67 points but close to Vietnam and Indonesia. -Thailand and Turkey get the lower score below 60 points.
16
Meat mincer FOB price and mould cost comparison for 8 Chinese suppliers and 1 Indonesia supplier.
We have cross checked the price with this supplier, they can’t decrease in order to assure the quality
Pls see below remark area
Pls see below remark area
Chinese Chinese supplier 2 supplier 3
17
Heating block FOB price and mould cost comparison for 8 Chinese suppliers
Client
18
Chinese supplier 1
Chinese supplier 2
Chinese supplier 3
Chinese supplier 4
Chinese supplier 5
Chinese supplier 6
Chinese supplier 7
Chinese supplier 8
Heating block FOB price and mould cost comparison for 2 Thailand suppliers, 2 Indonesia suppliers and 1 Vietnam supplier
Thailand
Client
19
Indonesia
Vietnam
China Recommended Chinese suppliers to take through audit process. Country
20
China
Supplier name
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Province
Zhejiang
Zhejiang
Zhejiang
Guangdong
Jiangsu
Zhejiang
RFI/RFQ received
Both Yes
Both Yes
Both Yes
Both Yes
Both Yes
Both Yes
Main Product
SHARP products, motorcycle accessories, lamp accessory, Medical device
Boiler parts, Motorcycle Aluminum die casting accessories, Auto parts
Reason for recommending
• Very aggressive & cooperative for doing business with client • Know mould very well. • High RFI score but quotation is too high
• The factory capability seems good • High RFI score • Have long experience on die casting products
•The factory capability seems good • Very aggressive & cooperative for doing business with client • Good RFI score
• The factory capability seems good • Good RFI score • The price of meat mincer is good and heating block very close to current price
RFI score
86 points
82 points
75 points
73 points
RFI ranking
No.1 in 9 ranked Chinese suppliers, and all 25 ranked suppliers for 4 countries
RFQ score
0 point
No.2 in 9 ranked No.3 in 9 ranked Chinese suppliers, Chinese suppliers, and all 25 ranked and No.4 in all 25 suppliers for 4 ranked suppliers for countries 4 countries 0 point 0 point (The price is higher (The price of meat but not too much) mincer is too high)
OEC: Auto parts, furniture, lamp accessories
Motorcycle accessories,
Did-casting products
• Very aggressive & cooperative for doing business with SEB • Main products are exported • Quotation is O.K.
63 points
No.4 in 9 ranked No.5 in 9 ranked Chinese suppliers, Chinese suppliers, and No.6 in all 25 and No.10 in all 25 ranked suppliers for 4 ranked suppliers for 4 countries countries 0 point (The price are 38 points very close to current price)
Lamp, gasoline engine accessories
• Very aggressive & cooperative for doing business with SEB • Good price
60 points No.6 in 9 ranked Chinese suppliers, and No.11 in all 25 ranked suppliers for 4 countries 50 points