Dragon Sourcing Your Tailored Approach to Emerging Markets
Electronics Sourcing Case Study China Turkey Vietnam
Agenda
1.
Objectives
2.
Approach
3.
Results
2
Objectives Context
Dragon Sourcing approach 1. Demand Analysis: Work with Client to define and understand the products and requirements (specs, volumes, materials, production technology requirements)
Client overall objectives : Identify new potential competitive suppliers in China, Vietnam and Turkey who can supply items at delivered prices below current levels (maintain/improve safety, quality and delivery)
2. Supply Market Analysis: Identify long list of potential suppliers in China , Vietnam and Turkey by leveraging B2B Websites, DS Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References.
Categories involved • Electronics
3. Telephone Pre-screening: Selection of suppliers to be included in the RFI/RFQ process by telephone pre-screening based on agreed simple criteria (e.g. capability to make the product, minimum company size, interest in participating) 4. Administer the NDA: Administration and chasing for completion of the NDA with suppliers that have been preselected 5. Develop RFI/RFQ & Scorecard template: Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre-qualify the capabilities of the suppliers, including: Background, Financials, Client and product experience, Quality certification & processes, Social Responsibility, Manufacturing/technology capability 6. Administer the RFI/RFQ: The RFI/RFQ is distributed to the relevant suppliers who have signed NDA, with telephone follow-up to push for maximum participation. 7. Analyze RFI /RFQ Responses: Analysis of RFI/RFQ responses to objectively rank the suppliers by capability and competitiveness, and to develop sense for price points 3
Agenda
1.
Objectives
2.
Approach
3.
Results
4
Total 16 RFQ Items used in China, Italy and Turkey, annual spend €4.75M
Destination
General description
Item no
Delivery term
Annual quantity(pcs)
Unit price
Annual spend
(Euro)
(Euro)
(CNY)
(CNY)
18204
€ 294,573.82
￥2,386,047.93
3PH BOARD ASSY WD COMPUT.
10752
€ 179,281.45
￥1,452,179.78
AS.SCH.CUOR SMDRF 3R 5804
30383
€ 142,708.03
￥1,155,935.05
70T72GD ( ODM )
30000
€ 333,333.33
￥2,700,000.00
7H51G ( ODM )
30000
€ 255,555.56
￥2,070,000.00
72H55F ( ODM )
50000
€ 333,333.33
￥2,700,000.00
3PH BOARD ASSY LB COMPUT.
15660
€ 267,169.09
￥2,164,069.64
3PH BOARD ASSY WD COMPUT.
45600
€ 801,109.09
￥6,488,983.64
AS.SCH.CUOR SMDRF 3R 5804
18404
€ 91,462.30
￥740,844.65
146640
€ 850,424.02
￥6,888,434.53
10078
€ 59,614.39
￥482,876.59
3DGT PCB THERMAL AMBRA
67152
€ 431,008.40
￥3,491,168.01
3DGT PCB HP RELE AMBRA
34037
€ 254,120.24
￥2,058,373.96
Timer green Ver PCB 7
50000
€ 281,060.61
￥2,276,590.91
Preco Green PCB 7
16000
€ 100,848.48
￥816,872.73
Preco White PCB 7
11000
€ 77,083.33
￥624,375.00
FUZZY PCB BWT +NEUTRAL SOFTWARE FUZZY PCB TWT/IT +NEUTRAL SOFTWARE Turkey
Annual spend
3PH BOARD ASSY LB COMPUT.
China
Italy
Unit price
€ 4,752,685.
Current Total Annual Spend
• Unit price doesn’t include VAT.
￥38,496,752
Euro:CNY=1:8.1 Euro:USD=1:1.32 Euro:TRY=1:2.81 5
Total suppliers 179 identified, 11 RFI/RFQ received ( China 7, Turkey 1, Vietnam 3)
Item
China
Turkey
Vietnam
Total
Suppliers identified
133
29
17
179
Suppliers called
133
29
17
179
Suppliers passed pre-screening
46
8
14
68
Suppliers NDA received
29
5
8
42
Suppliers RFI/RFQ sent
29
5
8
42
Suppliers RFI/RFQ received
7
1
3
11
6
7 RFI/RFQ received in China; 1 RFI/RFQ received in Turkey; 3 RFI/RFQ received in Vietnam Country
Supplier name
Province
China China China China China China China Turkey Vietnam Vietnam Vietnam
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10 Supplier 11
Guangdong Guangdong Guangdong Guangdong Jiangsu Zhejiang Zhejiang Ä°stanbul HaiDuong Binh Duong Binh Duong
China Y Y Y
Quote Client Italy Turkey Y Y Y Y Y Y
Y Y Y Y Y
Y Y Y
Y Y Y Y
Heilongjiang
Hai Duo ng
Jilin Liaoning
Xinjiang
Inner Mongolia Tianjin Hebei Shanxi Shandong Ningxia Qinghai Jiangsu Gansu Sha Henan AnhuiShanghai anxi Sichuan Hubei Sichuan Zhejiang Jiangxi Hunan Fujian Guizhou Gansu
Xizang
Yunan
Guangdong Guangxi Hong Kong
Taiwan
Binh Duong 7
Score card analysis for Client China: - 8 suppliers are ranked with an average score of 71. - 4 suppliers are above average score. - DS recommend Client to audit top 4 suppliers
Supplier name
Supplier location
Business information
Production
Quality system
Price Competitiveness
Total
Rank by score 10%
20%
30%
40%
100%
Supplier 1
China
8
20
27
36
91
1
Supplier 2
China
8
19
14
42
82
2
Supplier 3
Vietnam
8
20
21
28
76
3
Supplier 4
China
10
20
26
16
71
4
Supplier 5
China
8
19
20
22
68
5
Supplier 6
Turkey
10
16
21
16
63
6
Supplier 7
Vietnam
7
16
24
16
63
7
Supplier 8
China
6
20
14
13
53
8
8
Score card analysis: - 6 suppliers are ranked with an average score of 71. - 3 suppliers are above average score. - DS recommend Client to audit top 3 suppliers
Supplier name
Supplier location
Business information
Price Quality system Competitivenes s
Production
Total Rank by score
10%
20%
30%
40%
100%
Supplier 1
China
8
20
27
36
91
1
Supplier 2
Vietnam
8
20
21
40
88
2
Supplier 3
China
10
20
26
16
71
3
Supplier 4
Vietnam
7
16
24
16
63
4
Supplier 5
Turkey
10
16
21
13
61
5
Supplier 6
China
6
20
14
13
53
6
9
Company profile Supplier 1 - Vietnam Does your company have an export license ?(yes or no) How many years of export experience do you have?
COMPANY INFORMATION Company Name
XXXX Vietnam
Address
XXXXXXXXXXXX HaiDuong
Company Website CONTACT PERSON INFORMATION Contact Person
Mr. XXXXX
Title
G.Director
Tel
Panasonic No Domestic
Europe
US
Rest of the World
0%
0%
0%
100%
Clients
Industry
Country
% of sales
1
Panasonic LVBD
Assembly
Japan
50%
2
Panasonic
PCB
Japan
40%
3
Sharp
PCB
Japan
10%
Joint venture Who are your top 3 Clients? 2014 ( to date)
2013
0.37
0.59
2012
2011
16000m2
How many employees do you have?
40 employees
How many employees can communicate in English?
5 Worker Engineer
How many shift does your company work? How many hours one shift?
What is the percentage of turnover distributed to:
06/2012 2M
How many square meters(m²) does your factory occupy ?
How many people do you have in these positions? How long does your employee work in your company in average?
0.5%
Do you have European / international customers? If yes, which ones?
Mobile phone
What is your turnover in million USD?
3
12 years
Who is your main customer in white goods industry?
Fax
How much is your registration capital (USD)? What's the nature of your company? (Private, state owned, joint venture, etc)
Rank
Yes
Percentage of you turn over coming from white goods Industry? （%）
BUSINESS INFORMATION What date was your company founded?
76
Assembly and manufacturing of printed circuit board, What industry does your company mainly electronics devices, household electrical appliances and other serve? works related to above. Do you have subsidiaries outside Yes, Japan, China Vitenam? If yes, where? Do you supply products to white goods Yes, industry? If yes, how many years?
Town Province
RFI/RFQ score
8
2
QualityC Manage ontrol ment
R&D 1
1
5
Sales 1
CORPORATE RESPONSIBILITY Shortly describe your policy to cover We want to contribute to the protection of the global environment environment and conservation. and environmental protection of the local community Shortly describe your policy to cover We always create a lean working environment and always try to health and safety. not happen labor accident.
2 years
Shortly describe your policy to cover human rights.
Observance of the cover human rights (employee)
1
Shortly describe your policy to cover business ethics and anti-Bribery.
Productivity&Quality-Foundation for Sustainable Development
10
Company profile Supplier 1 - Vietnam PRODUCTION Assembly and manufacturing of printed circuit board, What's your main products? electronics devices, household electrical appliances and other works related to above. How many years of EMS experience do you have? 12 Years over experience OEM ODM Do you provide the right listed PCBA service? yes yes (Yes/No) Do you provide the right listed PCBA service for yes yes home appliance industry? Do you provide right listed PCBA servie for control yes yes board of white goods? In White goods industry, which client do you Panasonic provide right listed PCBA service? Does your company produce PCB in house? yes (Yes/No) Does your company do PCBA in house? (Yes/No) yes Can you source and purchase components for yes client? （Yes/No) Can you support client in product design? Yes/No) yes 50%
What's your capacity utilization？(%)
Please respond to questions for the following technologies：
In house or Subcontracted
SMT Reflow soldering
yes
Wire bonding
yes Worker
How many people do you have in these positions? How many of those speak and write english? Can your company design according to client's requirement? How long does your employee work in your company in average? How many shift does your company work? How many hours one shift?
8
Do you have below certificates ?
Manufacturing QMS
yes
ISO 14001
yes
TS16949
no
OHSAS18001
no
What international/domestic product certification CE do you have? UL Can your company provide ROHS self declaration and 3rd party test report? Can your company provide REACH self declaration and 3rd party test report?
What type of inspection to be conducted(100% or sample inspection)? If sampling inspection, what is your sampling rate?
Koki Japan/Ws302LF
Engineer 2
R&D 1
Quality Control 1
Do you have final products inspection and report?
11-096 Manageme Sale nt s 5 1 3
1
What performance do you achieve on average in out going quality measures (% rejected)? What is your internal rule regarding maximum reaction time of quality claim? Do you accept 3rd party QC?
yes How long do you keep the QC records?
2
Which test does yor company corporate with an external supplier?
1 shift
11
Date of Certifying Yes / No Certificat Org. e
ISO 9001
Do you have incoming material inspection and report?
If in house, If in house, please please provide prvide Brand/Type number of Machines
yes yes
Wave Soldering
Quality, Environmental and Product Certification
no yes yes no
yes
sample inspection. AQL(Acceptable Quality Level)
Yes, we have 0.5%
Daily Report yes 10 years NA
Company profile Supplier 1 - Vietnam
Quality, Environmental and Product Certification
Please list quality control equipment that you have in-house
Test
In house test Equipment (Yes/No)
Test
In house test eEquipment (Yes/No)
Test
In house test Equipment (Yes/No)
Test
In house test Equipment (Yes/No)
Optical visual inspection system
yes
Crimp Insertion tester
no
Thermal shock test
no
Micrometers of suitable size and design
yes
Xrf Rohs analyser
no
2d Microscopes
yes
High voltage test
yes
digital calipers of suitable design and size.
yes
Temperature gauges
yes
Cross cut and polishing machines
no
Weld monitoring equipment
yes
Scanning electron microscope
no
Circuit Test
yes
Optical measuring systems
no
Humidity recording system
no
Bevel protractors
no
On board circuit test
yes
Earth leakage test
ye
Insulation resistance test
no
Shadowgraph
no
Cold temperature cabinet
no
Performance tester
yes
Insulation tester
no
Xray testing
no
Profile gauges and templates
yes
Glow wire test
no
Thickness testers
yes
Surface tables
yes
Crimp height analysers
no
Resistance meters
yes
Emc Test
no
3 Axis CMM
no
Tracking test
no
High temperature oven
no
Ozone test chamber
no
3d Micorsopes
yes
12
Company certificate and picture Supplier 1 - Vietnam Business registration
Tax registration
Organization Code certificate
Factory entrance
Workshop
Machinery
Machinery
Warehouse
R&D
13
Agenda
1.
Objectives
2.
Approach
3.
Results
14
Unit DDP price analysis for Client China, total 6 items: 8 suppliers quote Client China items (5 from China, 1 from Turkey,2 from Vietnam). 1
Item no
2
3
4
5
China
Client current CNY
6
7
Turkey
8 Vietnam
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
Supplier 8
41037686
131.07
-
76.57
-
215.00
229.60
166.17
122.86
235.46
41037687
135.06
-
78.66
-
219.00
-
173.06
126.67
244.52
41034618
38.05
-
41.36
-
68.60
121.90
87.63
80.49
85.00
43613888
90.00
93.00
79.67
86.50
86.46
-
-
229.22
-
43612636
69.00
76.00
69.23
62.50
75.00
91.86
-
99.04
-
43613473
54.00
60.00
-
48.80
57.00
-
-
87.53
-
• Turkey and Vietnam supplier quote FOB price, DDP price is calculated by DS. Quotations lower than Client current price 15
Potential savings of 15% have been identified from Vietnamese supplier.
M CNY
16
Unit DDP price analysis for Client Italy, total 3 items: 6 suppliers quote Client Italy items (3 from China, 1 from Turkey, 2 from Vietnam).
1
Item no
Client current EUR
2
3
China
4
5
Turkey
6
Vietnam
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
41037686
17.06
10.94
27.93
28.60
20.66
15.34
29.24
41037687
17.57
11.20
28.45
-
21.51
15.81
30.35
41034618
4.97
5.04
7.36
15.22
10.92
10.06
10.62
• Turkey and Vietnam supplier quote FOB price, DDP price is calculated by DS. Quotations lower than Client current price 17
Potential savings of 33% identified from Vietnamese supplier on Italian parts
M EUR
18
Total potential savings of â‚Ź630k was identified
Total Potential Saving summary of Client China, Turkey and Italy
Total
% potential saving
# items quoted ( 16 RFQ items)
# items with saving
386,240
632,165
13.31%
15
11
107,361
161,619
3.40%
16
4
-
69,136
1.46%
3
3
-
13,094
0.28%
16
1
Supplier
Supplier location
China
Turkey
Italy
Supplier 1
China
235,623
10,302
Supplier 2
Vietnam
29,590
24,668
Supplier 3
China
69,136
-
Supplier 4
China
13,094
-
19