Dragon Sourcing - 龙 源 Your Tailored Sourcing Approach to LCC Sourcing
Gloves Sourcing Case Study
Agenda
1.
Objectives
2.
Approach
3.
Results
2
Objectives DS Approach consists in the following work steps:
Context
1. Work with client to define and understand the products and requirements (specs, volumes, materials etc.). 2. Identify long list of potential suppliers in China by incorporating existing list of DS potential suppliers and by leveraging the web, external databases and various networks of experts. 3. Carry out a phone pre-screening of the suppliers based on maximum 4-5 screening criteria per category (e.g.: min size, having certain quality certification, experience in relevant industry,…) with these criteria to be provided by the client 4. Develop the RFI/RFQ – jointly with the client – to include all key supplier qualification criteria (e.g.: financial, technology, manufacturing etc.) and quotation requirements. 5. Administer the RFI/RFQ process to ensure as high return rate as possible including quotation. 6. Analyze responses and use balance score card developed together with client’s management team to rank and recommend suppliers that the client needs to take through a formal qualification process factory audit. 7. Carry out factory audits (either alone or jointly with client’s auditors or buyers) of the suppliers that appear attractive and competitive based on the RFI/RFQ analysis report. (Optional)
Objectives • To carry out sourcing service for the below category to achieve cost savings and identify new qualified suppliers: Gloves
Geographical scope: • China • Thailand and Malaysia only for “nitrile gloves”
Deliverables: • • • • • •
Supplier long list RFI/RFQ template RFI/RFQ report Company profile Score card Recommend suppliers for audit
3
Agenda
1.
Objectives
2.
Approach
3.
Results
4
Total current yearly spend: AUD ~961 K; total target yearly spend: AUD ~859 K Category
Gloves
Type
No. of SKUs
Total current spend
Total Target spend
% in total target spend
Protective Glove
36 (including 19 different products)
$ 664,035
$ 614,468
71.5%
Anti Cut
13 (including 5 different products)
$ 196,212
$ 173,335
20.2%
Mechanical Protection
3 (including 1 product)
$ 54,330
$ 38,747
4.5%
Chemical resistant gloves
4 (including 3 different products)
$ 27,539
$ 19,278
2.2%
Chemical & Liquid Protection
2 (including 1 product)
$ 19,205
$ 13,444
1.6%
$ 961,321
$ 859,271
100%
% in total target spend 2.2%
1.6% 4.5%
20.2%
71.5%
Protective Glove
Anti Cut
Mechanical Protection
5
Chemical resistant gloves
Chemical & Liquid Protection
Below table indicate No. of sizes and spend for each item, item “gloves latex disp non-sterile� has the top 1 spend AUD ~357 K (41.5% of the total target spend) Category
Type
Protective Glove
Gloves
Gloves Latex Disp Non-sterile Gloves Knit Polycotton Gloves Hyflex Nitrile Palm Gloves Nitrile Ultratech Foam Gloves Uvex Helix C5 Gloves Cotton Interlock Gloves Nit T/Tuff Gloves Polycotton Knitted Gloves Polycotton Knitted Gloves Leather Prosafe Warrior Gloves Rubber Silverlined Gloves Hyflex Nit Gloves Food Safe Gloves Solvex Flockline Nitrile
No. of Sizes 2 1 2 3 2 1 3 4 1 2 2 2 2 2
No. of SKUs 2 1 2 3 2 1 3 4 1 2 2 2 2 2
Gloves Vantage Kevlar Stitch Leather
2
Gauntlets Solvex Nitrile Gloves Vinyl Food Safe Gloves Hyflex Ultra Gloves Ecogreen Nitrile Glove Kev Bdl Slve Lthr Pach
Item Description
$358,012 $78,107 $74,246 $23,262 $21,873 $20,668 $16,397 $11,965 $9,430 $8,914 $6,457 $5,968 $5,660 $5,514
$356,670 $77,513 $72,716 $16,283 $15,311 $14,467 $11,478 $8,375 $6,601 $6,239 $4,520 $4,178 $3,962 $3,859
% in total target spend 41.5% 9.0% 8.5% 1.9% 1.8% 1.7% 1.3% 1.0% 0.8% 0.7% 0.5% 0.5% 0.5% 0.4%
2
$4,926
$3,448
0.4%
2 1 1 1 1
2 1 1 1 1
$4,578 $3,520 $2,756 $1,784 $87,652
$3,205 $2,464 $1,929 $1,249 $85,950
0.4% 0.3% 0.2% 0.1% 10.0%
Total current spend Total target spend
Glove Atg Maxiflex Ultimate
3
3
$48,037
$38,946
4.5%
Anti Cut
Gloves Ansell Dyneema
2
2
$29,907
$27,007
3.1%
Mechanical Protection
Gloves Uvex Helix Gloves Maxicut 5 Ultimate Gloves Hylite Nitrile
3 4 3
3 4 3
$17,848 $12,768 $54,330
$12,494 $8,937 $38,747
1.5% 1.0% 4.5%
Gloves Disp Nitrile Tgc Orange
2
2
$19,729
$13,810
1.6%
Chemical resistant gloves
Gloves Solvex Flockline Nitrile Gloves Ecogreen Nitrile
1 1
1 1
$5,062 $2,748
$3,544 $1,924
0.4% 0.2%
Chemical & Liquid Protection
Gloves Ansell Microflex
2
2
$19,205
$13,444
1.6%
Total
58
$961,321
859,271
100%
6
19 RFI/RFQ and 11 only RFQ received, except 1 supplier is in Pennang of Malaysia, the other 29 suppliers are all located in China: 10 in Jiangsu, 8 in Shandong, 2 in Shanghai, 3 in Guangdong,3 in Zhejiang, 1 in Fujian, 1 in Beijing Gloves Saving compare to target price (AUD) RFQ Items quoted Province RFI (Y/N) RFI score (Y/N) (total 58 SKUs)
#
Country
1
China
Jiangsu
Y
Y
51
2
China
Shandong
Y
Y
27
3
China
Fujian
Y
Y
54
20’ with pallet
20' without pallet
78
88,253
109,036
64,518
78
151,564
156,525
146,490
78
286,534
327,558
233,612
119,544
112,034
LCL (1 pallet)
4
China
Jiangsu
Y
Y
8
75
115,877
5 6
China China
Shandong Jiangsu
Y Y
Y Y
53 51
73 69
374,742 170,847
415,175 188,994
315,688 163,942
7 8 9
China China China
Shandong Beijing Jiangsu
Y Y Y
Y Y Y
24 10 6
67 63 62
0 99,408 41,361
0 119,440 42,668
0 60,630 39,984
10
China
Jiangsu
Y
Y
24
59
132,909
140,888
131,807
11
China
Shandong
Y
Y
10
58
6,837
20,348
1,134
12
China
Shandong
Y
Y
6
56
39,793
42,760
39,392
13
China
Shanghai
Y
Y
6
56
8,183
8,965
7,161
14
China
Guangdong
Y
Y
23
56
127,501
131,902
122,902
15
China
Guangdong
Y
Y
5
55
111,854
131,344
73,966
16
China
Jiangsu
Y
Y
6
55
11,823
12,477
11,136
17
China
Jiangsu
Y
Y
21
50
121,857
125,523
118,008
18
Malaysia
Penang
Y
Y
9
44
7,183
8,290
7,099
19
China
Shanghai
Y
Y
22
33
20,077
21,285
19,532
20
China
Henan
N
Y
23
no RFI
160,321
120,761
155,500
21
China
Jiangsu
N
Y
15
no RFI
146,204
150,740
141,448
22
China
Shandong
N
Y
37
no RFI
142,990
160,809
127,896
23
China
Guangdong
N
Y
4
no RFI
124,317
143,496
86,612
24 25 26 27 28
China China China China China
Zhejiang Zhejiang Zhejiang Jiangsu Shandong
N N N N N
Y Y Y Y Y
8 9 3 3 7
no RFI no RFI no RFI no RFI no RFI
99,255 72,314 19,943 0 0
119,032 95,864 20,184 0 0
60,801 71,885 19,914 0 0
29
China
Shandong
N
Y
3
no RFI
0
0
0
no RFI
0
0
0
30
China
Jiangsu
N
Y
3
7
Score card analysis - 19 suppliers RFI are scored and ranked, 18 suppliers are from China, 1 supplier is from Malaysia China Section
Weight
Malaysia
Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Business information 20%
91
92
91
79
88
91
76
55
58
64
82
68
73
77
55
52
32
20
64
Production
30%
65
51
57
71
51
53
38
25
49
43
29
31
41
34
37
49
31
15
16
Quality system
30%
81
100
81
81
81
63
81
100
69
69
63
69
69
44
69
44
63
81
63
Social Responsibility
20%
80
70
90
70
80
70
60
70
60
60
60
60
40
80
60
70
80
0
40
Total
100%
78
78
78
75
73
67
63
62
59
58
56
56
56
55
55
52
50
33
44
(Score max 100 points) 100
RFI score card and filling rate
(Filling rate total 100%) 100%
75
75%
50
50%
25
25%
0
0% Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 China
Malaysia
8
China
75 75% 75 75%
50 50% 50 50%
25 25% 25 25%
0 0% 0 0%
Malaysia
9 Supplier 9 China
Social Responsiblity
Supplier 19
Supplier 18
Supplier 17
Supplier 16
Supplier 15
Supplier 14
Supplier 13
Supplier 12
Supplier 11
Supplier 10
Supplier 9
Production
Supplier 19
China
Supplier 18
Supplier 17
Supplier 16
Supplier 15
Supplier 14
Supplier 13
Supplier 12
Supplier 11
Malaysia
Supplier 10
Supplier 8
Supplier 7
Supplier 6
Supplier 5
Supplier 4
Supplier 3
(Score max 100 points) 100
Supplier 8
(Score max 100 points) 100
Supplier 7
Supplier 6
Supplier 5
Supplier 4
Supplier 3
(Filling rate total 100%) 100%
Supplier 2
Supplier 1
(Filling rate total 100%) 100%
Supplier 2
Quality system
Supplier 1
China
Supplier 19
Supplier 18
Supplier 17
Supplier 16
Supplier 15
Supplier 14
Supplier 13
Supplier 12
Supplier 11
Supplier 10
Supplier 9
Supplier 8
Business information
Supplier 19
Supplier 18
Supplier 17
Supplier 16
Supplier 15
Supplier 14
Supplier 13
Supplier 12
Supplier 11
Supplier 10
Supplier 9
(Score max 100 points) 100
Supplier 8
Supplier 7
Supplier 6
Supplier 5
Supplier 4
Supplier 3
Supplier 2
Supplier 1
(Score max 100 points) 100
Supplier 7
Supplier 6
Supplier 5
Supplier 4
Supplier 3
Supplier 2
Supplier 1
Score card analysis - RFI score and filling rate for each section Low score at production section due to only produce 1 category PPE product and not cooperated with global PPE clients, low score at social responsibility due to no ISO14000/OHSAS 18001 certificate and not a Sedex member (Filling rate total 100%) 100%
75 75% 75 75%
50 50% 50 50%
25 25% 25 25%
0 0% 0 0%
Malaysia (Filling rate total 100%) 100%
Malaysia
Agenda
1.
Objectives
2.
Approach
3.
Results
10
Client total target spend for total 5 types of gloves - 58 RFQ items is AUD 859K, 30 quoted suppliers’ spend are from AUD 11K to AUD 2.6M for 3 to 54 items; all 58 items from 25 suppliers have potential savings, the total savings range from 16% to 73%. Total spend, supplier potential savings for LCL and RFI score 3,000
100
78
78
2,000
0
65
0 0
164
33 316
234 0
0 0
20
61
74
61 0
Total Spend Supplier 1
58
55
1,000
87 146
75
75
63
52
1,500
500
78
73
67
1
0
50
72 128 20 155 123 132 141 112 118 39 0
0
0
Savings on SKUs with lower quotes
0
62
56
56
55
50
44 25 0
0
40
0 0
7
11
7 0
0
RFI score
Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Total 2,607,671 2,402,205 795,322 709,548 669,049 617,739 601,964 522,757 335,707 313,773 289,341 277,403 211,847 202,168 174,591 164,632 159,680 109,947 92,288 Spend # of SKU 3 51 51 6 24 54 22 53 10 8 5 4 27 10 9 34 3 23 23 quoted # of SKU lower 0 7 40 0 0 47 7 51 9 8 3 4 24 2 7 30 2 23 23 than target Savings on SKUs with 0 64,519 163,942 0 0 233,612 19,532 315,688 60,630 60,800 73,966 86,612 146,491 1,135 71,884 127,896 19,915 155,499 122,902 lower quotes Savings % on SKUs 0% 57% 62% 0% 0% 32% 52% 38% 16% 16% 21% 24% 65% 27% 47% 64% 74% 59% 57% with lower quotes
11
59
56
RFI score
Thousands AUD
2,500
Supplier 20
85,312
Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier 21 22 23 24 25 26 27 28 29 30
78,844 66,337 60,364 38,302
33,915
30,715 15,046 11,663 11,253 10,743
24
26
21
21
6
3
3
6
9
6
6
24
26
21
21
6
0
0
6
7
6
6
0
0
39,984
7,099
11,137
7,161
0%
0%
73%
52%
50%
40%
131,807
61%
141,448 112,035 118,008 39,392
64%
63%
66%
51%
5 suppliers are recommended for 2nd round RFQ Gloves
#
1
2
3
4
5
No. of Excluded from bids Items RFI RFQ RFI Province quoted Sedex Chemical Chemical (Y/N) (Y/N) score Anti Cut Mechanical (total 58 Protective & Liquid Resistant （13 SKUs） (3SKU) SKUs) (36 SKUs) （2 SKU） (4 SKUs)
Shandong
Jiangsu
Fujian
Shandong
Jiangsu
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
78
78
78
73
69
27
51
54
53
51
20/36
2/36
2/36
5/36
2/36
2/2
0
0
0
2/2
8/13
3/13
0
0
3/13
1/4
2/4
2/4
0
0
0
N
0
N
0
Y
0
0
12
Saving compare to target price % (AUD) ANZ safety coverag standards e of 20' 20’ LCL compliance bids by without (1 pallet) spend with pallet pallet ANSI, CE (EN 388:2003) ANSI, CE (AS/NZS 2161:2005/EN 3741:2003/EN 388:2003) CE (EN 388:2003/EN4 20/EN374/ EN407)
38%
95%
98%
151,564
88,253
286,534
Recommend reasons
156,525
No.1 RFI score with good savings, has cooperated with global PPE clients, 146,490 very good attitude and it's first vendor who quoted with entire packging information.
109,036
64,518
No.1 RFI score, found in 1983, big factory. High Quality they quoted so savings aren't very good, but can requote after receive samples. Almost all gloves they can produce.
327,558
No.1 RFI score, have good savings, almost all gloves they can produce. 233,612 Only one vendor who are a member of Sedex.
N
ANSI,CE,ISO
97%
374,742
415,175
N
ANSI, CE (AS/NZS 2161:2005/EN 388:2003)
95%
170,847
188,994
Have good savings, almost all gloves they can produce, very good attitude, can quote all other products which 315,688 client needs, they have lots of experience in auditing but seems they also use other factory to produce gloves have good savings, almost all gloves they can produce. Their prices are 163,942 nearly close to the prices with client, should know those kinds of gloves very well.
For 5 recommended suppliers , they are located in 3 province: 3 in Jiangsu, 1 in Fujian, 1 in Shandong
Protective Gloves
#
Province
RFI (Y/N)
No. of Items RFQ RFI score quoted (Y/N) (total 58 SKUs)
Saving compare to target price (AUD) 20’ with pallet
20' without pallet
LCL (1 pallet)
1
Shandong
Y
Y
78
27
151,564
156,525
146,490
2
Jiangsu
Y
Y
78
51
88,253
109,036
64,518
3
Fujian
Y
Y
78
54
286,534
327,558
233,612
4
Jiangsu
Y
Y
73
53
374,742
415,175
315,688
5
Jiangsu
Y
Y
69
51
170,847
188,994
163,942
13