Dragon Sourcing - éž™ ćş? 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