Sleep Suits Project for Airline Tender Case Study by Dragon Sourcing by john williams

Dragon Sourcing - 龙源 Delivering sustainable sourcing value from emerging markets

Sleep Suits project for airline tender

Case Study

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

- Client Introduction & Project Objectives,  Dragon Sourcing approach in 2 stages  Client Introduction: Client is a UK based manufacturer of luxury pyjamas nightwear and loungewear. They are bidding a tender from a leading airline and want to qualify a highly price competitive supplier from emerging market in a short period of 3-4 weeks.

Stage 1: Supplier Pre-Qualification 1. Demand Analysis 2. Supply Market Analysis 3. Develop RFI/RFQ 4. Administer RFI/RFQ 5. Analyse RFI/RFQ Responses

 Project Objectives: To identify and qualify potential suppliers by running Request for Information/Request for Quote (RFI-RFQ) process through procurement and sourcing direct from manufacturers in 6 countries for 24 SKU’s of top and bottom (pyjamas set) in 3 categories: men, women, uni-sex.

 Deliverables: Stage 1 - Supplier database - RFI-RFQ template & analysis report - Supplier profiles including factory and product pictures, suppliers location, price analysis, supplier recommendation.

 Supplier key requirement: Supplier should have prior experience in handling modal, must have social compliance and quality management certification and airline experience will be considered as advantage.

 Stage 2: Audits, Selection & Contracting to be finalised post stage 1 completion. - Audit Report - Samples (optional – if possible within stage 1) - Contract(s)

 Geographical scope: 6 countries in scope: 1. China. 2. India. 3. Vietnam 4. Turkey. 5. Pakistan and 6. Bangladesh.

- Total 24 SKUâ&#x20AC;&#x2122;s of top and bottom styles were included for costing for business call and first class passengers,

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

- Following steps were covered under stage 1: Supplier Pre-Qualification No.

Step

Deliverables

Demand Analysis Work with client to define and understand the Products and requirements (specs, volumes, current unit prices, delivery destinations of delivery/consumption). Collect samples of the products in order to ensure potential suppliers fully understand them

• Kick-Off Report

Supply Market Analysis Identify long list of potential manufacturers in countries in scope by leveraging B2B websites, DS database, fair catalogues, Chamber of Commerce, magazines, network, references.

• Supplier Long List

Telephone Pre-screening Selection of manufacturers to be included in the RFI/RFP process by telephone pre-screening based on agreed simple criteria (e.g. capability to make the product, can export, quality certifications, interest in participating, etc.

• Shortlist for RFI-RFQ process

Develop RFI/RFQ document Prepare an RFI/RFQ document, with an aligned balanced scorecard that has the objective to pre-qualify the competitiveness and capabilities of the manufacturers, including: background, financial, client and product experience, quality certification & processes, social responsibility, manufacturing/technology capability, R&D capability.

• RFI-RFQ Template • Balanced Scorecard

Administer RFI/RFQ: The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant manufacturers, with telephone follow-up to push for maximum participation.

• Completed RFI-RFQ’s

Analyze RFI/RFQ Responses: Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report, which profiles & objectively ranks the manufacturers by capability and competitiveness, including a recommendation for those to be audited.

• RFI-RFQ Report • Supplier Profiles • Proposed Shortlist for Audit.

- The estimated yearly volume was 1 million pajama set (top/bottom) collected at the project kick off stage. #

Style#

Product name

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

B-1a-Uni-T B-1b-Uni-P B-2a-Uni-T B-2b-Uni-P B-3a-Uni-T B-3b-Uni-P B-4a-Uni-T B-4b-Uni-P XXX XXX XXX XXX XXX XXX XXX XXX XXX

Hoodie Long Sleeves Top Cuff Trouser Hoodie Long Sleeves Top Cuff Trouser Round neck (Long Sleeves) Elasticated waistband Trouser Contrast Round neck (Long Sleeves) Contrast drawstring Trouser XXX XXX XXX XXX XXX XXX XXX XXX XXX

XXX

Class

Line

Annual Quantity in Sets

Business

Uni-sex

980,447

Women

6,583

Men

12,827

First

- Stage 1: Supplier Pre-Qualification timeframe. - Project was completed within 4 weeks as per schedule. Steps

Week 1

Week 2

Week 3

Week 4

1. Demand Analysis 2. Supply Market Analysis 3. Telephone Pre-screening RFI/RFQ approved

4. Develop RFI/RFQ

5. Administer RFI/RFQ Supplier profiles with recommendations.

6. Analyze RFI/RFQ Responses

2 7. Sample development from shortlisted suppliers

Not started

Done

In process

Delay

Stage 1- Supply Market Analysis: Process metrics follow up as per Country wise.

1. Supplier database was identified according to the category specific information, 2. Pre-screening was performed to filter the long list of suppliersâ&#x20AC;&#x2122; with the specific key requirement on this project. - Must have modal fabric experience, - Must have Corporate Social Responsibility certificate and Quality Management Certificate - Airline experience was considered good to have. Countries STEPS China

India

Vietnam

Turkey

Bangladesh

Pakistan

Total

Suppliers Identified

Shortlisted for RFI/RFQ

RFI/RFQ Sent

Intend to respond

Don't intend to respond

RFI/RFQ Received

Supplier Profile example

• •

Post pre-screening the suppliers, RFI-RFQ process was administered to filter out most capable suppliers,

Part of the RFQ sheet,

• • •

Post pre-screening the suppliers, RFI-RFQ process was administered to filter out most capable suppliers, Detail cost break down sheet was sent to the suppliers, FOB Price Breakdown in USD

Class

Product name

B-1a-Uni-T

Hoodie Long Sleeves Top

$0.00

B-1b-Uni-P

Cuff Trouser

$0.00

B-2a-Uni-T

Hoodie Long Sleeves Top

$0.00

B-2b-Uni-P

Cuff Trouser

$0.00 Business

Line

Accessories Sum of total Annual Quantity Fabric Cost/ Processing Cost, others Cost Per Set (Packaging and Label) garment cost in Sets PC Cost per PC per PC (top + bottom) per PC per PC

Style#

Uni-sex

980,447

B-3a-Uni-T

Round neck (Long Sleeves)

B-3b-Uni-P

$0.00

B-4a-Uni-T

B-4b-Uni-P

Elasticated waistband Trouser Contrast Round neck (Long Sleeves) Contrast drawstring Trouser

$0.00

$0.00 $0.00 $0.00

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

XXX

$0.00

Women

6,583

$0.00 $0.00

$0.00 $0.00 $0.00 $0.00

$0.00

First

Men

12,827

$0.00

$0.00 $0.00

$0.00

2-1 2-2 2-3 2-4 2-5 2-6 2-7 2-8 2-9

2-10

Suppliers were ranked and recommended based on their Company profile and price competitiveness. All the supplier profiles were shared with the client.

# 1 Supplier name DS/OM/001 Country Turkey Company type (Manufacturer/Trader/Agent) Manufacturer Company founded 2014 Number of employees 150 square meters(m²) of the workshop 3.000m² Industry mainly serve Textile Have export license Yes Years of export experience 4 Years Turnover (in Million USD) in the year 2017 XXX Quality Management and Corporate Social ISO 9001, ISO 14001 & SA 8000 Responsibility certificates Category can offer

Pajama Set

Padded slipper

In-house/sub-contract/Cannot offer

In – house

Subcontract n/a Yes

2-10

Can offer finish with UPF sun protection

ISO 9001 & SEDEX Padded slipper

Fabric bag

Pajama Set

In - house In-house

In-house

0.5 Yes

0.2 Yes

1 M pcs Yes

0.3 Yes

Subcontract n/a Yes

Yes

265

n/a

500+

XXX

Trade Trade

UAE

Trade

In-house

0.5 Yes

0.2 M Yes

n/a Yes

Yes Yes

Yes

Printing Embroidery Stitching SubIn - house In - house In-house contract Sub432 3 320 contract No

Client name

Country

Industry

XXX

Canada France Saudi Arabia

Airlines Airlines

In-house

Printing Embroidery Stitching

Yes

Turkey Qatar

Fabric bag

Yes, we can

Yes

Top 3- Clientele list

Padded slipper

Yes

In-house/sub-contract/Cannot offer

Industry

Pajama Set

Yes

Printing Embroidery Stitching

Country

Fabric bag

Yes

Stitching

ISO 9001, BSCI & WRAP

Yes

Production process In-house

total number of machines (sewing/Printing/Embroidery) in-house? Do you have any customers from airlines? If yes then please list them?

Padded slipper

4 DS/4I/004 China Manufacturer 2003 300 10000m² Airline products Yes 16 Years XXX

Yes，we have.

Yes

Client name 2-11

3 DS/LK/003 Pakistan Manufacturer 2005 600 10164m² Airline and Hotel Yes 13 Years XXX ISO 9001, SA 8000, BSCI, SEDEX & WRAP

Pajama Set

Fabric bag

Monthly production capacity 0.2 M Yes Can produce 1million sets a year Yes Yes Can offer fabric 93% Modal Rayon and 7% Yes Yes Yes Spandex Have prior experience in manufacturing Yes, we produced for Carrefour 2-8 garments/accessories made from Modal fabric Sa and also for our own brand 2-9

2 DS/FC/002 China Manufacturer 2015 210 1500m² Airlines, Hotels Yes 2 Years XXX

Airlines

Client name XXX

Printing Embroidery SubSubContract Contract Sub3 contract Yes

Country

Industry

Australia Germany

Hotel Hotel

Germany

Hotel

Client name XXX

Country

Industry

China Thailand

Hotel Airlines

Airlines

Minimum Maximum Below Average Above Average

- Price analysis was done for the 15 suppliers responded to the RFQ. - India 4, Turkey 3, China 2, Bangladesh 2, Pakistan 2 & Vietnam 2.

Loading 6500 set in 20ft container. Recommended supplier

Description

Class

Line

Supplier name

DS/OM/001

DS/FC/002

DS/LK/03

DS/4I/004

Country

Turkey

China

Pakistan

China

FOB FOB FOB FOB CIF Price CIF Price CIF Price CIF Price Annual Price Per Price Per Price Per Price Per Garment Per Set Per Set Garment Per Set Garment Per Set Quantity Set Set Set Set Cost / PC (top + (top + Cost / PC (top + Cost / PC (top + in Sets (top + (top + (top + (top + bottom) bottom) bottom) bottom) bottom) bottom) bottom) bottom)

Style #

1 2 3 4 5 6 7 8 9 10

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

XXX

14 15 16 17

XXX XXX XXX XXX

XXX

Hoodie Long Sleeves Top Cuff Trouser Hoodie Long Sleeves Top Cuff Trouser Business Uni-sex 9,80,447 class Round neck (Long Sleeves) Elasticated waistband Trouser Contrast Round neck (Long Sleeves) Contrast drawstring Trouser XXX XXX

XXX

Women

6,583

$3.05 $4.10 $3.05 $4.10 $3.05 $4.10 $3.05 $4.10 XXX XXX

XXX XXX XXX XXX XXX

First Class

XXX

Men

12,827

XXX

$8.00

$7.15

$7.29

$7.90

$8.00

$7.15

$7.29

$7.85

$7.95

$7.15

$7.29

$7.70

$7.80

XXX

$7.90

$4.45 $4.50 $4.35 $4.20 $4.15 $4.45 $4.25 $4.15 XXX XXX XXX

XXX XXX XXX XXX XXX XXX XXX

$8.95

$9.04

$8.55

$8.64

$8.60

$8.69

$8.40

$8.49

XXX

$7.29

XXX

$7.15

XXX

XXX XXX XXX XXX XXX XXX XXX

$11.30

$10.80

$10.90

$10.30

$10.40

$10.00

$10.10

XXX

$11.20

XXX

XXX XXX

$5.80 $5.40 $5.80 $5.00 $5.30 $5.00 $5.00 $5.00 XXX XXX

XXX

XXX XXX

4 suppliers were shortlisted based on the price competitiveness and Company profile, And further action was to develop samples from them.

Country

No. of suppliers recommended

China

Pakistan

Turkey

- High quality samples were developed from the shortlisted suppliers within short period of time, - Client to submit these samples to the airline with the bid,

TOP

BOTTOM

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

Conclusions  Whole project was carried out in 4 weeks with 70 suppliers identified & 15 complete RFI-RFQ received.

 All the recommended suppliers are certified with social compliance and quality management certification.  All the recommended suppliers were already supplying to leading airlines and/or leading hotels.  High quality samples were developed within a short period of time.  Overall based on our report, It helped client to join airline bid on time with attractive price from potential suppliers and samples to showcase.  A plan was framed to audit the recommended suppliers as a next step post bid results, ** Dragon Sourcing has experienced team for performing Technical and Social Corporate Responsibility (CSR) audit or hybrid model combing both.