Solar Powered Lantern Case Study – Dragon Sourcing by john williams

Dragon Sourcing - 龙源 Delivering sustainable sourcing value from emerging markets

Case Study Solar Powered Lantern

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Objectives and approach Dragon Sourcing approach

Context

Project Objectives: • Identify and recommend new potential competitive suppliers manufacturing solar powered lantern.

Phase 1: Country selection:

Geographical scope: India, Taiwan and Southeast Asia.

Phase 2: Supplier identification: • Step 1: Building long list of potential suppliers • Step 2: Pre-screening the identified suppliers.

Deliverables: Phase 1: Country selection Phase 2: Supplier identification: • Database of potential suppliers • Number of suppliers passed and failed in pre-screening with rejection analysis for the number of suppliers failed.

Phase 3: RFI-RFQ management To be validated by the client post completing phase 2. • • •

Phase 3: RFI-RFQ management To be validated by the client post completing phase 2. • RFI-RFQ template • RFI-RFQ analysis report • DS Recommendation on next steps

Step 1: Develop RFI-RFQ template and have it validated by the client Step 2: Administer the RFI-RFQ with suppliers that have passed the phone screening process Step 3: Analyse responses in order to recommend suppliers for the qualification phase (auditing and sampling).

Phase 1: Country selection Completed. Analysis based on : HS 940550 Non-electrical lamps and lighting fittings, n.e.s.

Production Analysis • Major countries producing solar lanterns is not certain. • Available data suggests top countries producing solar energy. • Key players for solar lamps (including indoor, outdoor, garden, street lamps, etc.) and Solar Lantern Flashlights are available.

Top 5 Countries producing most Solar Energy 1 2 3 4 5

China USA India Japan Viet Nam Export Analysis

• 90% of Global export for Non-electrical lamps and lighting fittings is shared by top 10 countries, with China contributing 67.4%

Exporters

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -

World China USA Netherlands Germany Denmark India UK Poland Latvia Taiwan Italy Sweden France Spain Belgium Czech Republic Viet Nam Malaysia Thailand Finland Oman South Korea Austria Mexico Israel Rest of the World

Exported value in % share in Global 2020 (M USD) Export 801.98 100% 540.80 67.4% 33.85 4.2% 29.44 3.7% 29.20 3.6% 21.85 2.7% 21.44 2.7% 17.22 2.1% 11.79 1.5% 9.60 1.2% 8.90 1.1% 6.43 0.8% 5.79 0.7% 5.21 0.6% 4.78 0.6% 4.58 0.6% 4.57 0.6% 4.28 0.5% 4.21 0.5% 3.59 0.4% 2.61 0.3% 2.37 0.3% 2.36 0.3% 1.75 0.2% 1.63 0.2% 1.53 0.2% 22.22 3%

We are trying to search for suppliers in all the southeast Asian Countries and not just limiting to Vietnam, Malaysia &Thailand. We did a quick search to find suppliers in Poland and Latvia but could find any hence we did not recommend them in phase 2. © 2022 Dragon Sourcing. All rights reserved.

Approach & Schedule, Phase 2 and 3: Supplier Pre-Qualification No. 1.

3. No.

Steps in Phase 2 (completed) Deliverables Demand Analysis Work with “the clients” to define and understand the products and requirements (specs, volumes, materials, • Kick-Off Report production technology requirements) Supply Market Analysis Identify long list of potential suppliers in India, Taiwan and southeast Asia by leveraging B2B Websites, DS • Supplier list Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References. Telephone Pre-screening Selection of suppliers to be included in the RFI-RFQ process by telephone pre-screening based on agreed • Shortlist for RFI-RFQ simple criteria (e.g., capability to make the product, minimum company size, quality certifications, interest in process participating) Steps in phase 3 (on-going) 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 suppliers, including Background, Financials, Client references and Product experience, Quality certification & processes, Social Responsibility, Manufacturing/technology capability, R&D capability Administer RFI/RFQ: The RFI-RFQ is translated in relevant languages and distributed to the suppliers, with telephone follow-up to push for maximum participation.

Deliverables

• RFI-RFQ Template

• Completed RFI-RFQ’s

Develop with the “the client” a balance score card to evaluate suppliers according to RFI/RFQ

• Score card

Analyze RFI/RFQ Responses: Analysis of RFI-RFQ responses and preparation of a report which profiles & objectively ranks the suppliers by capability, including a recommendation for those to be included in the qualification process (auditing and sampling).

• RFI-RFQ Report.

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Ongoing Completed

Phase 2 is completed. Phase 3 is current scope. STEPS

Delayed

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Phase 2 - Completed 1. Demand Analysis

2. Supply Market Analysis

3. Telephone Pre-screening Phase 3 (started on Feb. 1)

4. Develop RFI/RFQ

5. Administer RFI/RFQ 6. Analyze RFI/RFQ responses & send RFQ report.

•

Supplier profiles with recommendations.

Please note, Schedule may be impacted by the time taken to receive information and validations from the client.

Week 8

Demand Analysis, Estimated yearly spend for Solar Powered Lantern for 10 -12 SKU is xxx Product Description

300 Lumen solar powered inflatable lantern with 4000mAh battery. Chargeable by USB and has phone charger (USB output)

~30,000+

150 Lumen solar powered inflatable lantern with 2000mAh battery. Chargeable by USB and has phone charger (USB output)

~100,000+

Product Picture

~10 additional SKUs: Other variations of size / color / battery size / charging capabilities

Total

•

Buying FOB Price/PC in $US

Annual Volumes

Annual Spends

~150,000+

~300,000+ PCS

All of designs are inflatable. The body material is thermoplastic polyurethane (TPU) – it does not contain any PVC.

Demand Analysis, Reference pictures for pre-screening process only. Representative Product Pictures can be shared in the pre-screening process.

Clarification questions Dragon Sourcing General Questions • 1. 2. 3. 4.

Feedback from client

What are your key MUST HAVE criteria for a suitable supplier selection? For example, No Traders, Export Capability Any must have certifications. Willing to do OEM as per client requirement.

FYI: Supplier would be disqualified during pre-screening if they don’t have MUST have requirement. • What are your PREFERRED criteria for a suitable supplier selection? • It could be quality and/or product certification that supplier must be certified. For example, ISO 9001 certified, GMP, CE, others.

• •

• • •

FYI: Supplier would NOT be disqualified If they don’t have these requirement however It • would be considered as advantage & additional points will be given supplier during scoring process. • Would you accept supplier if they are Importing component from China but doing • overall assembly in the factory?

Must be a solar powered lantern manufacturer (traders/distributors discarded) Export capabilities

ISO 9001, ISO 14001; BSCI Certification (or similar) Transparency to battery supplier (good working relationship) to facilitate transport / import paperwork Logistics capabilities – willing to do smaller shipments of ~500 units directly to certain international customers Yes

• Are there any suppliers that should NOT be included in the process?

•

None in the regions of interest (India, Taiwan, South East Asia)

• Can we disclose your name when communicating with the suppliers? FYI: This is crucial part of the project. As it help in getting better response rate from the suppliers. If not than It may result in getting low response rate.

•

No, we would like to remain anonymous at this stage.

•

Do you have any specific type of solar lantern requirements ?

•

It is a proprietary design for an inflatable solar lantern.

•

What are the estimated annual volumes?

•

~300,000+ units across ~10-12 primary SKUs

•

Destination (seaport name and City)

•

Any other information that we should know?

•

n/a

Pre-screening – Used to disqualify unsuitable suppliers from the RFI-RFQ process.

Examples of Pre-screening question •

Must be a producing and/or able to produce inflatable solar powered lanterns (traders/distributors discarded)

Importance

Must have

• Does your company have export license or can export through an agent

• ISO 9001, ISO 14001

Good to have

• BSCI Certification (or similar)

Good to have

Must have

• Pre-screening process is a filtration stage from large database of suppliers identified to discard the suppliers not able to meet the minimum key criteria. • Suppliers not able to answer the question for “Must have” will be considered as disqualified for next phase 3 - RFI-RFQ management

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

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.

Pre-screening process was initiated after receiving client validation, This process was to filter the long list of identified suppliers prior moving them to the RFI-RFQ step

Process metrics follow up. Phase 2 completed with 25 suppliers passed in pre-screening. Phase 3: RFI-RFQ process completed with 6 suppliers responded to the RFI-RFQ.

Phase

Process

Supplier Identification

India

Taiwan

Southeast Asia

Total

• Suppliers identified

• Supplier passed pre-screening

• Suppliers failed Pre- screening

• Number of RFI/RFQ sent

• Intend to respond

• Don't intend to respond

• Number of RFI/RFQ received

Steps

Phase 2 Completed

Phase 3 Current Scope Completed

Pre-screening Process

RFI/RFQ Administration

• • •

Certification information for the 25 suppliers passed in pre-screening. 15 suppliers are certified with ISO 9001 and 4 suppliers are certified with ISO 14001. Only 1 supplier certified with social compliance certification - ISO 45001.

# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Company Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name Supplier Name

Country India India India India India India India India India India India India India India India Taiwan Taiwan Vietnam Vietnam Vietnam Vietnam

ISO 9001 15 ISO 9001 Yes Yes Yes Yes Yes No Yes No No In process Yes Yes No Yes In process No No Yes No Yes Yes

ISO 14001 4 ISO 14001 No Yes Yes No No No No No No In process Yes No No No No No No No No No No

Social Compliance certificate 1 Yes/No Certificate name No Nil No Nil Yes ISO 45001 No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil No Nil

Supplier Name

Vietnam

Yes

Nil

Supplier Name

Vietnam

Yes

Nil

Supplier Name

Vietnam

Nil

Supplier Name

Malaysia

Yes

CE & ROHS

ISO 45001 is the world's international standard for occupational health and safety, issued to protect employees and visitors from work-related accidents and diseases.

Phase 2

Process metrics follow up: Pre-screening process rejection analysis. - From 94 identified suppliers, 69 of them failed in prescreening,

Phone screening Rejection reason • •

Only producing Solar panels, Solar streetlights, Solar traffic lights etc. Producing solar lanterns but not producing inflatable designs and not interested to develop

South Asia

East Asia

Southeast Asia

In Total

India

Taiwan

Vietnam

Malaysia

Thailand Philippines Indonesia Cambodia Singapore

Laos

33.3%

24.6%

•

Traders/distributors/Importer

18.8%

•

Stopped producing due to low demand and Not interested anymore

13.0%

•

Duplicate supplier

2.9%

•

Unable to contact them/ Company Shutdown

5.8%

•

Manufacturing facility is in China

1.4%

100%

Total

Only producing Solar panels, Solar street lights, Solar traffic lights etc. 2

Producing solar lanterns but not producing inflatable designs and not interested to develop Traders/distributors/Importer Stopped producing due to low demand and Not interested anymore Duplicate supplier

Unable to contact them/ Company Shutdown 17

Manufacturing facility is in China

Process metrics follow up:

Phase 3

Supply Market Analysis: Process metrics follow up, 94 suppliers identified, 25 suppliers passed phone pre-screening, 6 suppliers replied RFI-RFQ finally (5 Indian suppliers, 1 Vietnamese supplier)

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Process metrics follow up - The rejection reasons Note: 94 suppliers identified; 25 suppliers passed phone pre-screening and RFI/RFQ sent to all of them, and 19 supplier rejected during RFI-RFQ administration Supplier RFI/RFQ rejection analysis

Total

Cambodia

India

Not interested to continue Can't meet the technical requirement / quality standard

Total Rejected

Consider themselves not competent for this project Not responding to calls/mails even after following up several times Need more detailed drawings / samples to proceed (don’t have similar product experience)

Indonesia Malaysia Philippines Singapore Thailand

Vietnam

Laos

Taiwan

REMARK: Please refer below feedback from 3 Indian suppliers who rejected RFI-RFQ for reason: Need samples to proceed. All the 3 suppliers don’t have experience in producing “inflatable” solar lanterns and they are very small factories, 3 of them expressed interest to study the samples & give their feedback. please let us know if you want to send samples to those 3 suppliers Company Name

Website

Supplier Name

website

Supplier Name

website

Supplier Name

website

products they can manufacture Solar Lamp, Solar Items Solar Products / Solar Light Products, Solar Panel, Solar Module, Solar Inverter, Solar Street Light, Solar Home Light. Solar lights, Solar panels, Solar generators, Solar lanterns, Solar fan, Solar refrigerator, solar water heater & many more solar items Solar lantern, Solar fan, induction cooker

Company year found

Export experience

number of Employee

Production type

Certifications

2012

4 years, Bangladesh, Jordan

Automatic / semi automatic

ISO 9001, CE - Both expired

1998

21 years: Africa, England & Australia

N/a

ISO 9001

1998

Yes, only Nepal

SemiAutomatic

none

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Supplier location: India and Vietnam - Totally 6 suppliers replied RFI-RFQ, 5 in India, 1 in Vietnam # 1 2 3 4 5 6

Supplier Name Supplier Supplier Supplier Supplier Supplier Supplier

City Quận Một Sahibabad Pune New Delhi Delhi New Delhi

Province Ho Chi Minh Uttar Pradesh Maharashtra Delhi Delhi Delhi

Country Vietnam India India India India India

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Suppliers Assessment Balance score card used as below weighting

Section Name

Section Weighting

Business information

20%

Production

30%

Quality management

30%

Social responsibility

10%

Certificate, documents and pictures

10%

TOTAL

100%

Suppliers Assessment RFI scoring of all the 6 suppliers. RFI scoring has an impact if the RFI filling rate is low.

Agenda

Objectives and approach

Project planning and demand analysis

Key Supplier Statistics

Reasons not to respond

Supplier map

Supplier RFI Score and rank

Price Analysis and Supplier profiles and recommendation

Summary of Price Analysis

Please note, – Received quote from total 6 suppliers (5 from India and 1 from Vietnam). – All the suppliers have offered FOB price in US$ per unit. – There are 3 Indian suppliers whose prices seem competitive – Regarding the Vietnamese supplier, they quoted the similar spec. item and required mold cost. – All the Indian suppliers that quoted have demanded to see original product as samples for them to study & give final price. Our suggestion for sampling process would be to send originals samples only to shortlisted suppliers to study and get their final price

Price Analysis: FOB Price summary of the 6 RFI/RFQs received: 5 Indian suppliers and 1 Vietnamese supplier. There are 3 Indian suppliers whose prices seem competitive ** The Vietnamese supplier quoted the similar spec items, please refer the supplier RFQ for detail spec. Recommended Supplier name

Supplier

Country

India

Vietnam

No. of SKUs offered (out of 2)

RFI Rank

RFI Score

Product Product Picture Identifier

Product Name

Annual Client FOB Quantity Diff% FOB Price Diff% FOB Price Diff% FOB Price Diff% FOB Price Diff% FOB Price Diff% buying Price Price (Pcs)

LUMPLMXC

PackLite Max 2-in-1 Phone Charger

117000

$8.15

$7.90 3.1%

$7.90

3.1%

$7.85

3.7%

LUMPLNVB

PackLite Nova USB

77600

$5.62

$5.26 6.4%

$6.35

-13.0%

$8.50

-51.2%

Mold cost (USD)

FOB Price Average

$10.00 -22.7% $14.65 -79.8% **$13.65 -67.5% $10.33

$9.00

-60.1% $16.45 -192.7% **$11.55 -105.5%

$9.52

$15,000

** Please note the items quoted are of similar item, please refer the supplier RFQ sheet for detail. The supplier expressed if client pay the mold cost, they could produce the same spec as client required.

Price Analysis: FOB Price summary of the 6 RFI/RFQs received, 5 Indian suppliers and 1 Vietnamese supplier. There are 3 Indian suppliers whose prices seem competitive. ** The Vietnamese supplier quoted the similar spec items, please refer the supplier RFQ for detail spec. Recommended Supplier name Country No. of SKUs offered (out of 2) RFI Rank RFI Score Product Identifier

Product Picture

Product Name

Supplier India 2 2 71

Client Annual buying Quantit Price y (Pcs)

Client Spend value

Spend value

Diff Savings %

Supplier India 2 4 52 Spend value

Supplier India 2 3 59

Diff Savings %

Spend value

Supplier India 2 5 50

Diff Savings %

Spend value

Supplier India 2 1 74

Diff Savings %

Spend value

Supplier Vietnam 2 6 42

Diff% Savings

Spend value

Diff% Savings

LUMPLMXC

PackLite Max 2-in-1 Phone Charger

$8.15 117000 $953,550 $924,300 3% $29,250 $924,300 3% $29,250 $918,450 4% $35,100 $1,170,000 -23%

$1,714,050 -80%

** -67% $1,597,050

LUMPLNVB

PackLite Nova USB

$5.62

$1,276,520 -193%

** -106% $896,280

77600 $436,112 $408,176 6% $27,936 $492,760 -13%

Total Spend value

$1,389,662

$659,600 -51%

$698,400 -60%

$1,332,476

$1,417,060

$1,578,050

$1,868,400

$2,990,570

$2,493,330

Mold Cost USD

$15,000

Annual Savings of both SKU

$57,186 (2 SKUs)

$29,250 (1 SKU)

$35,100 (1 SKU)

Supplier Profiles Below is summary profile of the 6 suppliers that responded to RFI-RFQ, detailed profiles are in the PDF file ** Please note the supplier xxx doesn’t have CE certificate. Recommended

Supplier Name

Country

Number of Years of export RFI Score employees experience

Monthly production capacity for inflatable solar lanterns (pcs)

Logistics – willing to do smaller shipments of 500 units directly ISO 9001 to certain international (Yes/No) customers(Yes/No)

Social Compliance certification

Price savings Product Certification: from 2 SKU’s CE, ROHS, ISO 13485 or 1 SKU’s

Supplier

India

150

200000

Yes

ISO 14001

CE, ROHS, ISO 13485

$57,186

Supplier Supplier Supplier Supplier Supplier

India

20000

Yes

$35,100

India

100000

Yes

in-process

$29,250

India

50000

India

25000

Yes

ISO 14001

Vietnam

200

10000

YES

** The supplier xxx doesn’t have CE, if the CE is required then this supplier is not suitable for next step.

The supplier detail company profile please refer below file attached:

Solar Powered Lantern Case Study – Dragon Sourcing

Articles inside

Administer RFI/RFQ

Telephone Pre-screening

Develop RFI/RFQ