Wear Plate Sourcing Project Case Study by Dragon Sourcing

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Delivering sustainable sourcing value from emerging markets

Wear Plate Sourcing Case Study

1

Agenda

1.

Objectives , work plan and time line

2.

Approach

2

Objectives and approach Dragon Sourcing approach

Context Objectives: • Identify new potential competitive suppliers in China

1. Demand Analysis: Work with client to define and understand the products and requirements (specs, volumes, materials, production technology requirements)

Categories involved • Wear Plate

2. Supply Market Analysis: Identify long list of potential suppliers in China and India by leveraging B2B Websites, DS Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References.

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)

Deliverables: • Supplier database • NDA signed • RFI / RFQ report • Scorecard • Company profiles • Recommended audit supplier list

4. Administer NDA: NDA provided by client is distributed to the suppliers who passed pre-screen , with telephone follow-up to push for maximum signing.

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

The project is scheduled to complete in 10 weeks.

Steps

Who

0

Kick off

Client/ DS

1

Demand Analysis

Client/ DS

2

Supply Market Analysis

DS

3

Telephone pre-screening

DS

4

NDA administration

DS

5

Develop the RFI-RFQ

6

Conduct RFI/RFQ Administration

7

Analyze RFI/RFQ Responses

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Week 9

Week 10

Client/ DS

DS

Client/ DS

TODAY Not-started

4

Started

Delayed

Finished

Milestones

Agenda

1.

Objectives , work plan and time line

2.

Approach

5

Demand analysis ,Total 6 items, RFQ spend 0.3 M USD.

#

Description

Annual Spend

1

WEAR PLATE; 274 skirt

70,137

2

WEAR PLATE, 370MM x 370MM x 20MM WITH 5 HOLES

54,795

3

WEAR PLATE, 370MM x 160MM x 20MM WITH 3 HOLES

16,439

4

WEAR PLATE; DUA PLATE TYPE C BOTTOM SIDE LINER

18,049

5

HOPPER OVERSIZE; TO SUIT DSM SCREEN BOXES C/W 6 ONLY NI-HARD CHUTE LINER WEAR PLATES;

113,319

6

WEAR PLATE;CONVEYOR HEAD CHUTE IMPACT PLATE LP23S;9 ON 12 DUA PLATE WITH STUDS

29,142

Total

6

301,882

114 suppliers identified, all called, 52 passed pre-screenďźŒ29 NDA signed , total 29 RFI/RFQ sent, 13 RFI/RFQ Received.

Step

Wear Plate

Total number of suppliers

114

Supplier called

114

Shortlisted supplier after call

52

NDA sent

52

NDA Received

29

RFI/RFQ sent

29

RFI/RFQ received

13

7

Balance Scorecard used to rank the suppliers Business information Year Founded

Weight of criteria 15%

Turnover in 2018 in USD

15%

Number of employees

15%

English speaking R&D

5%

Export experience

10%

Profile of Top Customers

15%

Mining industry experience

5%

Export experience to Australia

5%

Provide company presentation

5%

Cooperation during RFI/RFQ

5%

Completeness of RFI/RFQ Subtotal Production

5% 100% Weight of criteria

Production of Wear plate (Ton)

20%

Experience of Bisalloy steel

10%

Cutting in house

10%

Drilling in house

10%

Subtotal

100%

Scoring 1=After 2010 2=Between 2000-2010 3=Before 2000 1=Less than 5M 2=5-10M 3=10-20M 4=above 20M 1= < 100 2=100-200 3=201-500 4=>500 0=No 1=Yes 1=Less than 5 years 2=5-10 years 3=More than 10 years 1=Local customers 2=National customers 3=International customers as client 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 1= Poor 2= Satisfactory 3= Excellent 1= Poor (< 70%) 2= Satisfactory (70-85%) 3= Excellent(>85%) Scoring 1 = < 2000 2= 2001-5000 3 = 5001-10000 4 => 10000 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes

Max Score per criteria

Weight of the section

3

4

Casting in house

10%

Bending in house

6%

Heat treatment in house

6%

Welding in house

6%

ERP system

6%

Product/service traceability system

6%

4

1 3 30%

Equipment maintenance program in place Formalďź?documented inventory management system Subtotal Quality system

3

5% 5% 100% Weight of criteria

ISO 9001

25%

ISO 14001

6%

Company-wide quality manual

6%

Incoming material inspection and report

6%

On line quality inspection and report

6%

Final products inspection and report?

6%

Hardness test in house

10%

Chemical composition in house

10%

Proof Stress test in house

7%

Tensile Strength in house

6%

Elongation test in house

6%

1 1 1 3

3 30% Weight of Max Score per criteria the section 4

1

35%

1

Charpy Impact test in house

1

Subtotal

35%

8

0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes 0=No 1=Yes

6% 100%

1 1 1 1 1 1 1 1

Scoring 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes 0= No 1= Yes

Max Score per criteria

35% Weight of the section

1 1 1 1 1 1 35% 1 1 1 1 1 1 35%

The 6 RFQ items total spend is USD 0.3M , the 13 suppliers have potential savings ranging from 10% to 43.5%ďź&#x152; USD 30k-131k.

Suppliers potential saving and RFI score Potential Saving(USD)

RFI score

140,000

100

120,000 80

60

80,000

RFI score

Potential saving

100,000

60,000

40

40,000 20 20,000

0

0 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10Supplier 11Supplier 12Supplier 13

9

Supplier profile XXX What Incoterms can your company quote and operate?

Sales revenue Turnover (in Million USD)

Supplier Information Company Name City Country Website Contact Name Contact Phone Contact Mobile Contact Email

XXX XXX China XXX XXX XXX XXX

2017 10 Nort Sales distribution Domestic Euro h Ame pe rica % Sales exports to the main 4 15 35 markets

XXX

Customer reference

1. Business information Your company's type?

Which year was your company founded?

Manufacturer

Ownership Your company's business registration number How many employees does your company have?

How many square meters(m²) does your workshop occupy?

What industry does your company mainly serve?

Private

Employee structure How many people does your company have in these positions?

How many people can speak English in each department?

Does your company have export license?

How many years of export experience do you have?

FOB, CIF

Top 1 client

2018 12

Customer name Bradken

2001 Top 2 Top 3 Top 4 Top 5

XXX

client client client client

Highland Hensly

Industry

2016 8 Japan and Korea 2

Country

transporta Australia tion agriculture Canada mining America

Sout h Ame rica 4

20000 mining industry,agriculture industry,transportation industry,oil&gas industry,building industry,etc.

Qua Manage Sales lity R&D Production Finance Purchasin Con ment g trol 6

14

4

4

200

4

4

2

12

1

1

0

1

2

Does your company have production Yes operating instruction on site?

Does your company have production and Yes safety training for each worker?

Does your company use ERP system?

Yes

Which ERP system does your company use?

Does your company have product/service traceability system?

Yes 18

Yes

Does your company have an equipment maintenance program in place?

Yes

Does your company have a formalďź? inventory management system?

Yes

documented

Have any western companies conducted a social audit of your company during the last two years?

10

Intersky

Yes

10

25

5

Main supplied product

% of sales

railway parts

40

tillage parts mining parts

60 80

2. Production

138

Rest of Afric Austra the world a lia

Supplier profile XXX 3. Quality management

Production

Does your company have below certificates?

Yes / No

Certifying Org.

Expiry date

ISO 9001

Yes

NSF-ISR

2018/7/24

TS 16949

Yes

NSF-ISR

2018/7/24

Does your company have a documented company-wide quality manual?

Yes

Does your company have incoming material inspection and report?

Yes

Does your company have daily on line quality inspection and report?

Yes

Does your company have final products inspection and report?

Yes

Production capability Annual capacity in 2018 (Ton) Production in 2018 (Ton) What's your company's current capacity utilization? (%) How many production lines does your company have?

Does your company supply wear plate to any mining company? (Y/N) Does your company export wear plate to Australia?

(Y/N) Does your company ever use Bisalloy steel?

Does your company make wear plate by below hardness steel?

Does your company have clear and systematic procedure to collect, register, handle and solve customer complaints?

Yes

Production equipment

What performance does your company achieve on average in out going quality measures (% rejected)ďź&#x;

10

Cutting Drilling Casting Bending Heat treatment Welding

4.Social responsibility Does your company have below certificated?

Yes/No

ISO 14001

No

SA 8000

No

BSCI

No

OHSAS 18001

No

Have any western companies conducted a social audit of your company during the last two years?

Yes

If yes, which companies have conducted such audits? Does your company pass the audit?

KALTEST BILISIM A.S. No.

Certifying Org.

Expiry date

Test in house Hardness Chemical composition Proof Stress Tensile Strength Elongation Charpy Impact

11

Wear plate 12000 6000

75% 3 Yes Yes Yes None Does your company have below equipment in house?

(Yes/No) Yes Yes Yes Yes Yes No

How many machine /production line does your company have?

1 1 3 1 2 0 2. Quality management

Details ( Brand, speed, years acquiredďź&#x152;etc )

Does your company do below test Can your company provide test in house? (Yes/No) report? (Yes/No) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Supplier profile XXX 5. Certificate, documents and pictures

Please upload your company's presentation.

Please upload your company's business registration certificate.

Please upload your company's equipment list.

Please upload your company's ISO 9001 certificate.

Please upload your company's pictures of entrance, workshop, machine, test lab, warehouse and office.

Please upload your company's TS 16949 certificate.

Please upload your company's ISO 14001 certificate.

No selected files

Please upload your company's SA 8000 certificate.

No selected files

Please upload pictures of your company's main products.

12

No selected files