Dragon Sourcing - 龙 源 Delivering sustainable sourcing value from emerging markets
Bottle Sourcing Project – Case study report
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
2
DS launched sourcing activities RFI and RFQ for Food Double wall Glass Bottle in China
Product & Country
China
Double Wall Glass Bottle
3
New thread design received
4
Specification of the product Product Specifications
Information
Picture & Documents
Project Deadline
Drawing asap / present product Feb
Target sourcing market
China
Material Data
Glass must be arsenic and heavy metals free Glass must pass the LFGB and FDA test
Current price (FOB US$), Target price
Target price XXX USD
Annual Volume & P Frequency
15.000 pcs/year – First order: 5000
NDA needed (Y/N)
No NDA
Suppliers NOT be included (Y/N)
None, but contact of current contacted supplier was passed
Require a Sample
Not discussed yet
Mention Client ? (Y/N)
No, since it is delivery in China from China, not mention client name and keep local delivery
Technical information
Product specifications document
Suppliers capabilities - Certifications - Production equipment/Process - Final Testing requirement
Pass FDA tests (SGS) Bottle needs to be clean, no heavy metal content, transparent (no arsenic use)
Packaging requirements
Not discussed yet
4-5 criteria for phone pre-screening
Not discussed yet 5
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
6
The project is scheduled on 8 weeks. Phase
Process
Weeks
Collect information from client
1
Questions clarification with DS & Client
1
Identify list of potential suppliers in China
1
Launch supplier phone screening
2
Develop the RFI doc jointly with Client
2
RFI to finalize & approve by Client
1
RFI send out & follow-up
2
Develop the score card doc jointly with Client
2
Analyze responses & rank suppliers
2
Supplier selection
Recommend suppliers to be audited / samples ordering / drawing confirmation
1
Sampling
Collect and send supplier’s samples
3
Client confirms what are the suppliers to audit
2
Suppliers visit preparation
2
Suppliers audit
1
Final scoring report for audited suppliers
2
Demand & Analysis
Supplier identification
1 RFI/RFQ process
2
Steps
Supplier Audit
November 17
December 24
7
1
8
15
Not started
Jan 22
29
Started
5
Completed
Over 42 suppliers in China, 38 RFI/RFQ were sent, 24 suppliers intend to respond, 18 sent RFI and/or Quotation Scully project - supplier follow-up
•
45
Suppliers identified Suppliers contacted RFI/RFQ sent Intend to respond Sent RFI&RFQ completed
4 suppliers not reachable
# of Suppliers 42 38 38 24 12 (18 only quote)
40
14 Suppliers gave up No reply, only focused on steel or plastic products, Traders, not interested Don’t make this product
35
30
6 suppliers did not sent RFI 7 suppliers gave up
25
20
42 38
15
25 10
18 12
5
0 # Suppliers identifed
# RFI/RFQ sent
# Confirmed ITR
8
# Quotes received
# RFI received
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
9
Among 18 quotations received, 13 suppliers quoted according to Client’s drawing (DS RFQ).
It was verified that all quotes exclude lid
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
10
Supplier 8
Supplier 9
Supplier 10
Supplier 11
Supplier 12 Supplier 13
5 other suppliers quoted their current products only. Considering the short project timeline and that supplier don’t fill in RFI/RFQ we’d suggest to exclude those suppliers for the next steps Supplier
Price (ex. Works)
Production information
Supplier 14
16.2 RMB/ pcs
• sample received quality of the thread not so good
Supplier 15
1.65 USD/ pcs
• Trader • 410ml similar bottl
Supplier 16
2.72 USD/ pcs
• 300 ML, it is coated, suitable for sublimation printing
Supplier 17
3.74 USD/ pcs (incl. lid)
• 330ML Lid, 462g: Lid PP/PC • Body: glass(food grade high borosilicate glass/HBG)
Supplier 18
4.40 USD/pcs (incl. lid）
• 320ML
11
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
12
For the 9 suppliers who provided filled in RFI/RFQ, each 8 sections of the RFI/RFQ were scored and weighted
Section
Weight
Business information
20%
CSR
5%
Process and Technology
5%
Production Capability
5%
Quality control and equipment
15%
Certifications
20%
Cooperation
5%
Quotation
25%
Total
100%
13
Business information, CST, Process & Technology, Production capability Business information
Year founded
Workfloor size (m²)?
Number of production facilities
Number of employees
Weight
10%
Scoring 1=After 2010 2=Between 2006 to 2010 3=Between 2000 to 2005 4=Between 1995 and 1999 5=Before 1995
5%
1=Less than 1,000m2 2=1,000m2-5,000m2 3=5,000m2-10,000m2 4=Above 10,000m2
2%
1=Only 1 facility 2= 2 facilities 3= 3 facilities 4= 4 facilities 5= 5 or more facilities
6%
1= Less than 50 employees 2= 50-100 employees 3= 100-300 employees 4= 300-500 employees 5= Above 500 employees
10%
1= 2 people 2= 3-5 people 3= 6-10 people 4= 10-15 people 5= above 15 people
Export experience
CSR
Weight of criteria
Scoring
Respect Child Labor Regulation
25%
0=No 1=Yes
Adhere to China Labor Law (36h)
25%
0=No 1=Yes
Adhere to all rules and regulation about environmental issues
25%
0=No 1=Yes
Adhere to all rules and regulation on safety issues
20%
0=No 1=Yes
Would sign a confidentiality agreement
5%
0=No 1=Yes
Process and Technology
Weight of criteria
Scoring
Have stable and long-term partners to supply raw material
30%
0=No 1=Yes
Have an equipment list
40%
10%
0= No export, no license 1= Less than 5 years 2= 5-10 years 3= More than 10 years
0=No 1=Yes 2=Yes and provided
Products specially developped for international market
5%
0= No 1= Yes
Production Process description provided
30%
0= Not provided 1= Provided with detais 2 = Provided, majority of processes in-house
Supplier has European customers
15%
0= No Only Chinese customers 1= Yes but no detailled provided 2 = Yes, detailled provided, small EU companies 3 = Yes, European /FR customers large corporations
Supplier provided e-catalogue
2%
0= No 1= Yes
Annual supply capacity in 2014
30%
0 = not provided 1 = provided
2013 Turnover in USD
5%
1= Less than 3M 2= Between 4 to 10M 3= Between 10 to 20M 4= More than 20M
Annual LVE supply capacity in 2013
20%
0 = not provided 1 = provided
Increase/decrease in supply capacity
10%
15%
0= No export 1= Export but not to Europe (<5%) 2= < 15% export to Europe 3= 15% to 30% 4 = 30% to 50% export to Europe 5= > 50% export to EU
0=Decrease 1=Stable 2=Increase
40%
1=Below 10% 2=Between 10-25% 3=Between 25-50% 4=Over 50%
Number of employees with good english communication skills
% of sales share
Top 5 Customers
15%
0=Mainly Asian, small coprorations. 1= Wordwide large corporations 2= EU main customers, large corporations
Production Capability
% of Double wall glass bottles products among all the categories you manufacture
14
Weight of criteria
Scoring
Quality, Certifications, Cooperation and quotation Quality control and equipment
Weight of criteria
Scoring
Certifications
Weight of criteria
0=No 1=Yes
Have ISO 9001
20%
0=No 1=Yes
5%
0=None 1=Have, rdetails not provided 2=Have, regularity provided 3=Have, several times per dayd & at different points of the production process
Have ISO 14001
20%
0=No 1=Yes
5%
0=None 1=Sample inspection following AQL 2=100% inspection
Other International Standards applied
25%
0=No 1=Yes
What is the rate of defect / rejected ?
5%
0=Above 5% 1=Between 2-5% 2=Between 1-2% 3=Below 1%
Agree to send product to SGS laboratory for FDA certiification
35%
0=No 1=Yes
Process for treating defects found
5%
0=Nothing is done, no reply 1=Clear process to separate, discard or rework
What is your internal rule regarding reaction time of quality claim?
5%
0 = No reply, no process 1 = Defined process detailled 2= Defined process including problemn solving options provided (reparation, replacement, etc.)
For how long are the QC records kept
5%
0=Below 6 months 1=Between 6 and 12 months 2=Between 12 and 24 months 3=Above 24 months
Supplier has incoming material inspection and report
5%
0=No 1=Yes
Supplier accepts 3rd Party QC
5%
Regularity of in-line quality inspection (Y/N)
Type of inspection conducted for finished goods
Quality Control equipment
5%
0=No details given 1=Between 1-3 equipment listed 2=4-6 equipment equipment listed 3=6-10 equipment listed 4=More then 10 equipment listed
Test the products before delivery
5%
0=No 1= Finished products Test listed
50%
0 = Not replied 1 = <2 2 = between 2-4 3 = Can meet 4 4 =Yes can meet all important (not sleeve, lightweight, 5 = Yes, all of them
Can meet all requirements listed from Client ?
Cooperation
Scoring
Weight of criteria
Scoring
Cooperation during RFI
50%
1= Poor 2= Satisfactory 3= Excellent
Completeness of RFI
50%
1= Poor 2= Satisfactory 3= Excellent
Quotation
Quotation competitiveness
15
Weight of criteria
Scoring
100%
0 = Quotes highest (20%) 1 = Above average price (20%-50%) 2 = 20%-50% lowest prices 3 = 20% lowest prices Below 1.20 USD Target price
The 11 suppliers who submitted RFI reply were scored. Average score is 63 %, 7 suppliers are above the average
Average 63%
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
16
Supplier 8
Supplier 9 Supplier 10 Supplier 11
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
17
10 suppliers were shortlisted as they provided quotation, RFI and mould information. Mould price is stable between 800 to 1,000 RMB, lead time could be decreased to 10-15 days for most suppliers
# Supplier Name
RFI received
RFQ Can make Scoring OK Thread Scoring % received Mould results 3D ?
Mould cost
Mould Lead time
Existing samples shipment status
Quotation / bottle Incl. Excl. lid (incl. delivery & Tranport excl. lid) RMB/pcs
1
Supplier 1
YES
YES
YES
6
67%
TBC
1,000 RMB
15 days
Received
ok
ok
6.16 RMB
2
Supplier 2
YES
YES
YES
8
63%
Can’t open AI
No mould Hand made 85USD sample
15 days
Client has sample
ok
ok
8.7 RMB
3
Supplier 3
YES
YES
YES
7
65%
OK
100$ sample 100$ mould 1,300 TOTAL
10 days
N/A
ok
ok
9.8 RMB
4
Supplier 4
YES
YES
YES
2
71%
OK
950 RMB
11 days
On the way to DS
ok
ok
10.47 RMB
5
Supplier 5
YES
YES
YES
4
68%
TBC
TBC
NA
TBC
TBC
ok
11.8 RMB
6
Supplier 6
YES
YES
YES
3
70%
OK
800 RMB
8 days
Received
ok
ok
12.7 RMB
7
Supplier 7
YES
YES
YES
1
76%
OK
1,000 RMB
7-10 days
Received
ok
ok
13.95 RMB
8
Supplier 8
YES
YES
YES
9
61%
TBC
1,000 RMB
40 days (TBC)
Will be sent to DS on Friday
ok
No
14.5 RMB
9
Supplier 9
YES
YES
YES
5
68%
Ok
800 RMB
15 days
TBC
ok
ok
15.8 RMB
10
Supplier 10
YES
YES
YES
10
54%
Ok
6000 RMB
30 days
Received
ok
No
27.5 RMB
Not recommended for next steps (low score, difficult communication, high price, long lead time low reactivity） Recommended for next steps (score, reactivity, price, lead time）
Based on scoring, pricing and mould information, DS recommends to move forward with the 6 following suppliers 1, 6, 7 Others suppliers (2,3,4,5,8,9) could be interesting as well depending on priotiry on price or quality/scoring 18
5 Suppliers sent samples of their current product to DS, then sent to client
19
Agenda
1.
Project scope
2.
Project planning & progress
3.
Quotation sum up
4.
Suppliers scoring
5.
Summary and recommendation
6.
Relevant QC job for bottles
20
QC job - General information and Sampling standard
Product Name
Bottle
Order quantity (units)
7404 Pcs
CTN
1234 cartons
Supplier
FG
Inspection date
Mar 30th, 2018
Inspection type
Random Inspection
Sampling standard
MIL-STD-105E
Sampling level
General Inspection LEVEL II
Inspected sample size
200pcs+80 pcs(80 pcs measured dimensions)
Approval sample(s) available
No
Inspection location
Yongkang
Factory cooperation during the inspection
Good
Factory Quality organization
Good
Inspectorâ&#x20AC;&#x2122;s general opinion on the factory
Good
21
Product Details: Bottle
Dimension in mm (body) Height
213.7 +/- 1.0 mm
Diameter outside
71.6 + 0.1 / - 0 mm
Height innerpipe
199.7 +/- 0.3 mm
Logo Height
13.0+0/-1.0 mm
Diameter neck
41.1 + 0 /- 0.3 mm Gauge
Liquid content / water level
0.5 l +/- 5%
Picture
22
Defects analysis - summary
Defect Description
CRI
MAJ
MIN
Log printing defect
-
1
-
Scratch and caved
-
1
Push Button lock
-
Push button and printing Logo not align
-
-
1
Polishing defect
-
-
1
The bottle neck dusty due to polishing defect
Non-slip bottom
-
1
-
Non-slip bottom not in right place
# Total of defectives found
-
3
3
1
23
Comments
Push Button lock system loosen
Defect pictures Scratch and caved
Logo printing defect
24
Defect pictures
Non-slip bottom not in right place.
Push button and Logo not align.
25
Defect pictures Polishing defect.
Push Button lock system loosen .
26
Packing, storage and shipping marks inspection Storage condition .
27
Packing, storage and shipping marks inspection
Master Carton
Sample 1
Sample 2
Sample 3
Sample 4
Sample 5
Size(cm)
25*18.5*30.5
25*18.3*30.5
24.8*18.4*30.5
25.1*18.1*30.6
24.9*18.3*30.7
G.W(kg)
2.90
2.91
2.90
2.91
2.90
28
Inner Packing, Bar code , Mater carton and inner box product instructions inspection 6 inner boxes/carton.
Master carton and inner box bar code are the same.
29
Leaking Test, Sampling size: 13 bottles Fill in carbonated Drinks
Bottles placed on its side and keeping 60 minutes, Test result: Not found leaking
30
Dropping and leaking Test, Sampling size: 5 bottles From 0.75m height drop bottles to surface 3 times( onetime lid, on time side and one time base), Fill in water and placed on its side 30 minutes After dropping test, Test result: Not found plastic parts separate from bottle, Not found leaking
31
Printing stability test, Sampling size: 5 bottles Printing stability test Test result: Not found printing fade
32