Dragon Sourcing - 龙 源 Your Tailored Sourcing Approach to LCC Sourcing
Case study Electric Vehicle Sourcing in China
Agenda
1. Context
2. Sourcing Strategy
Context Objectives: • To carry sourcing services for electric vehicle to identify potential Mini Chinese Electric Vehicles suppliers to export to Brazil and finally to improve local Mobility on crowed Cities by offering mini electric cars with best in class value for money product
Geographical scope • China
Deliverables: • • • • •
Supplier database RFI-RFQ template RFI-RFQ analysis report Manufacturer profiles with rankings including factory and product pictures. DS Recommendation on next steps
Agenda
1. Context
2. Sourcing Strategy
Following STEPS were covered for end to end sourcing Supplier Pre-Qualification •
Demand analysis to define and understand the product and key requirements
•
Prepare for audits (audit schedule, budget, and finalise audit questionnaire)
•
Supply analysis to identify list of potential suppliers
•
Conduct audits.
•
Recommend suppliers for sampling
Telephone pre-screening based on agreed simple criteria
•
Sample development & testing
•
Develop RFI/RFQ template
•
•
Conduct RFI/RFQ administration
•
Analyze RFI/RFQ responses and issue RFI-RFQ report
•
Recommend suppliers for next phase
Key activities
•
STEP 1
Procurement Operations
Selection & Contracting
Negotiation, contracting and final selection
STEP 2
•
Manage P/O and agree payment terms and details.
•
Check in process production quality
•
Conduct pre-shipment QC
•
Arrange logistics
•
Manage payments
•
Manage supplier performance
•
Monitor new sourcing opportunities
STEP 3
Project is schedule to be completed in 8 weeks Week 1
Week 2
Week3
Week 4
Week 5
Week 6
Week 7
Week 8
Dec.21 Dec.25
Dec.28 Jan.1
Jan.4 Jan.8
Jan.11 Jan.15
Jan.18 Jan.22
Jan.25 Jan.29
Feb.1 Feb.5
Feb.8 Feb.12
Stage 1 1. Demand Analysis
2. Supply Market Analysis
Supplier long list
3. Telephone pre-screening
4. NDA (optional)
5. Develop RFI-RFQ
No need Draft of RFI/RFQ for approval
6. Administer RFI-RFQ
7.Develp score card Supplier profiles with recommendations
8. Analyse RFI/RFQ Responses
Not started
Finished
Today Delay In process
Milestone
Step 1 ： Supplier Pre-Qualification Supplier Pre-Qualification •
Demand analysis to define and understand the product and key requirements
•
Supply analysis to identify list of potential suppliers
Key activities
•
Telephone pre-screening based on agreed simple criteria
•
Develop RFI/RFQ template
•
Conduct RFI/RFQ administration
•
Analyze RFI/RFQ responses and issue RFI-RFQ report
•
Recommend suppliers for next phase
STEP 1
Procurement Operations
Selection & Contracting •
Prepare for audits (audit schedule, budget, and finalise audit questionnaire)
•
Conduct audits.
•
Recommend suppliers for sampling
• •
•
Manage P/O and agree payment terms and details.
•
Check in process production quality
•
Conduct pre-shipment QC
•
Arrange logistics
•
Manage payments
•
Manage supplier performance
•
Monitor new sourcing opportunities
Sample development & testing Negotiation, contracting and final selection
STEP 2
STEP 3
Demand Analysis – Electric Vehicle Product Specifications Product Name Estimated Yearly Volume Destination Country
Reference Pictures
Mini Electric Vehicle • still not defined, as will depend on target customers acceptance and the business models we will prioritize. Besides that, cost of acquisition, Design and Quality will defined our projected volumes Brazil
Target Price • 1- Value for Money Product solution 1a/ Low cost of acquisition, maintenance and overall cost of ownership 1b/ good/high quality - considered reason for purchase as Design 1c/ attractive exterior/interior design - very important elements for Brazilian customers 1d/ reasonable vehicle attributes, such as driving dynamics, noise & vibrations, acceptable performance, satisfactory gradeability for São Paulo city streets with >20% of inclination 1e/ able to be charged on 110 or 220V conventional house type power outlets Other boundary conditions
Hongguang mini EV
• 2- City only usage, not allowed to drive on Freeways or Highways outside of city limits • 3- Warranty Terms - 1, 2 or 3 years of Warranty coverage for total vehicle or specific parts • 4- Spare Parts - important topic, so we can decide whether we need a Technical Assistant Center or depending of the failure we should consider total loss • 5- Homologation Process - Need to be able to pass on Brazil homologation process and classification categories driven by Contran and other legal entities • 6- Safety & Comfort features - airbags, air conditioning, electronic stability control, all relevant items, but not mandatory, unless required by local Homologation Process need investigation
Baojun E100
Dragon Sourcing has developed an online sourcing tool (GSP) to manage sourcing projects end to end. The GSP provides: •
A central database of hundreds of thousands of suppliers •
•
Management of sourcing projects from start to finish.
Tools to facilitate supplier research, pre-screening, RFI-RFQ administration & qualifying supplier through ranking process and generating supplier profiles. Complete unique online platform suitable for Global Strategic Sourcing process. http://gsp.dragonsourcing.com
As a first step, extensive supplier data base was built leveraging multiple sources of information & from existing DS database.
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Pre-screening process was initiated after receiving client validation, This process was to filter the long list of identified suppliers prior to moving them to the RFI-RFQ step
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Post pre-screening the suppliers, RFI-RFQ process was administered to filter out most capable suppliers.
dard n a t s RFI-
tion a m infor s s ne busi
i on t c u od & pr
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Suppliers Identification results 33 suppliers identified, 18 suppliers passed telephone, 2 suppliers responded only to the RFI, 5 suppliers responded to the RFI and RFQ, 4 suppliers are pending
35 33
30
25
-
No. of suppliers
20 18
18
-
15
¼ is interested in the project, but they will only continue if client agrees to invest in the Brazil certificate, and client can be it's exclusive dealer ¼ is interested in the project but their products will be launched in year 2023 ¼ has launched their mini EV car and interested in the project but they focus on the domestic market, and for the export market they have not decided if need to use current model or develop a new model, so they hope client can re-contact them in the 2nd half of this year ¼ is interested in the project, but their mini EV is in development stage, client may can contact them in the 2nd half of this year
10 7 5
5
4
2 0
Suppliers identified
Suppliers passed phone pre-screening
RFI-RFQ sent
Suppliers responded RFI only
Suppliers responded RFI and RFQ
Suppliers rejected RFI-RFQ
Suppliers pending for RFI-RFQ
Rejection reasons for phone pre-screening and RFI-RFQ administration Rejection Reason: Pre Screening Company bankrupt Not Interested Stopped producing Unable to contact No export, focus on domestic market Total Rejected
Total 1 3 3 3 5 15
% 7% 20% 20% 20% 33% 100%
Rejection Reason: Pre Screening
20%
20% 20%
Total
%
1 1
14% 14%
2 3 7
29% 43% 100%
Rejection Reason: RFI-RFQ administration
7%
33%
Rejection Reason: RFI-RFQ administration As the battery is outsourced and the battery factory is not so interested to export so they think after service will be a problem Can't meet the technical requirement / quality standard Belong to same group and will reply by the headquarter of the group Not interested to continue Total Rejected
Company bankrupt Not Interested Stopped producing Unable to contact No export, focus on domestic market
As the battery is outsourced and the battery factory is not so interested to export so they think after service will be a problem Can't meet the technical requirement / quality standard Belong to same group and will reply by the headquarter of the group Not interested to continue
RFI Score Card 7 Suppliers replied RFI – the highest score is 87 points, the lowest score is 48 points, the average score is 63 points
RFI Score Card Suppliers whose score is low is because (1) they have not done Brazil business before, and (2) limited business information was provided
RFQ analysis 5 suppliers replied to the RFQ, supplier 3 has the most competitive price, but supplier 1 has already done Brazil homologation and has dealer in Brazil but their prices are well above the target, more detailed information is on the next page
RFQ analysis Below table shows more detailed product information Supplier Name
Supplier 1
Supplier 3
Supplier 5
Supplier 4
Supplier 2
Model
Product Picture
confidential
-Exterior dimensions (L×W×H) (mm): 3690×1685×1570 -Wheelbase (mm): 2390 -Endurance Mileage (NEDC): 320 -Seats: 5 Product Spec. -Maximum speed （ km/h ） : 102 -Airbag quantity: 2 -ABS+EBD -MP5/Bluetooth/CCS-Cruise control system
Inco term
-Exterior dimensions (L×W×H) -Exterior dimensions (L×W×H) (mm): 2250x1400x1680 (mm): 3690×1670×1495 -Wheelbase (mm): 1560 -Wheelbase (mm): 2390 -Endurance Mileage(NEDC): 150 -Endurance Mileage(NEDC): 120 -Seats: 2 -Seats: 4 -curb weight (kg): 600 -Maximum speed （ km/h ） : -Maximum speed(km/h): 80 for sport pattern, 102 60 for eco pattern -Standard charging: China GB -Airbag + ABS -Airbag quantity: 0 (they can add -EU standard charging port and charging gun airbag if required) (home use) -ABS+EBD -air condition + reverse camera + remote key
-Exterior dimensions (L×W×H) (mm): -endurance -Exterior dimensions (L×W×H) 3770*1650*1570 mileage: (mm): 3733x1644x1492 -Wheelbase (mm): 2410 100KM + -Wheelbase (mm): 2390 -Endurance Mileage(NEDC): -other -Endurance Mileage(NEDC): 255 125 information is -Seats: 4 -Seats: 5 confidential but -curb weight (kg): 1110 -curb weight (kg): 1180 will be similar -Maximum speed(km/h): 102 -Maximum speed(km/h): 125 to E-Star -Airbag + ABS + EBD -Airbag: 2 -ABS+EBD+HAC
-Exterior dimensions (L×W×H) (mm): 3650×1570×1485 -Wheelbase (mm): 2345 -Endurance Mileage(NEDC): 250 -Seats: 4 -curb weight (kg): 978 -Maximum speed(km/h): >=100 -battery type: ternary lithium battery NCM -Airbag + ABS + EBD
-Exterior dimensions (L×W×H) (mm): 3620x1610x1525 -Wheelbase (mm): 2440 -Endurance Mileage(NEDC): 130 -Seats: 4 -Maximum speed(km/h ） : 100 -Airbag + ABS
DDP
DDP
FOB
FOB
FOB
EXW
EXW
FOB
Already launched
Jan. 2022
Already launched
Already launched
end of 2021
Already launched
stopped production, if order Qty more than 10K, they can consider to restart to produce
2nd half year of 2021
No
No, they homologation fee they consulted is as below: 1) IBAMA, the cost is around USD50,000 2) DENATRAN-CAT the cost is around USD25,000 3) INMETRO (for all the components requested, such as wheel, glasses, tire), the cost is around USD200,000 4) send one car to Brazil, ($5,500+delivery cost) Lead time is 4-6 months
No
No
No
No
No
Price/unit
Launch Time
Has this model been homologated for the Brazilian market
Company profile/detaile d spec.
Yes
Locations of suppliers who replied to the RFI/RFQ
2
No.
Supplier Name
City
Province
RFI ranking
1
Supplier 1
Chongqing
Chongqing
5
2
Supplier 2
Baoding
Hebei
6
3
Supplier 3
Shenzhen
Guangdong
2
4
Supplier 4
Nanchang
Jiangxi
4
5
Supplier 5
Dezhou
Shandong
3
6
Supplier 6
Weifang
Shandong
7
7
Supplier 7
Hefei
Anhui
1
5 6
7 1
4
3
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