Bandages and Dressing Sourcing Project – Case Study by john williams

Dragon Sourcing - 龙源 Delivering sustainable sourcing value from emerging markets

Bandages and Dressing sourcing project

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

Objectives and approach Context Client Introduction: • Client with headquarters in USA is a manufacture of world-famous insect bite repellents, first aids, survival products, burn remedy products and others. Project Objectives: • Identify and recommend new potential competitive supplies manufacturing Bandages and Dressing.

Geographical scope: India and Vietnam Deliverables: • Supplier database • RFI-RFQ template • RFI-RFQ analysis report • Supplier profiles with rankings • DS Recommendation on next steps

Dragon Sourcing approach Stage 1: Supplier Pre-Qualification 1. Demand Analysis 2. Supply Market Analysis 3. Telephone Pre-screening 4. Develop RFI/RFQ 5. Administer RFI/RFQ 6. Analyse RFI/RFQ Responses Stage 2: Do the qualification work for the shortlisted bandage suppliers: 1. Auditing the shortlisted suppliers and sample testing in order to select the company to partner with. 2. Investigating all the other first aid kit items to see what could be sourced locally at what costs. 3. Finalising the economics of the deal with the selected/qualified supplier to include all items and the kitting of all the items. 4. Finalising the contract with the selected supplier

- Total 12 SKUs for Bandages and Dressing were selected to run in the RFQ process.

Category

Product picture

Item#

Product name

Bandages 1" x 3"

Knuckle Adhesive Bandages 1-1/2"x3"

Fabric Adhesive Bandage

Premium Elastic Bandage w/SelfClosures

Category

Non-Sterile Conforming Bandage

Non-Woven Triangular Bandage

Item#

Product name

Sterile NonAdherent Pads

Non adherent dressing, 3"x4"

Sterile Hydrogel Burn Dressing

Burn Dressing 4"x4"

Nonwoven dressing 2"x2", 4 Ply

Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply

Glacier Gel Blister & Burning Dressing (

Elastic Bandage 3” x 5yard Sterile Non-Woven Sponges

Conforming Bandage 3” x 4.1yard

Triangular Bandage

Product picture

Gel Blister & Burning Dressing

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

- Following steps were covered in Stage 1: Supplier Pre-Qualification No. 1.

Steps in stage 1 Demand Analysis Work with client to define and understand the products and requirements (specs, volumes, materials, production technology requirements) Supply Market Analysis Identify long list of potential suppliers in India and Vietnam by leveraging B2B Websites, DS 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 simple criteria (e.g., capability to make the product, minimum company size, quality certifications, interest in participating) Develop RFI/RFQ document Prepare an RFI-RFQ document, with an aligned Balanced Scorecard that has the objective to prequalify 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

Deliverables • Kick-Off Report

• Supplier list

• Shortlist for RFI-RFQ process

• RFI-RFQ Template

Administer RFI/RFQ: The RFI-RFQ is translated in relevant languages and distributed to the suppliers, with telephone followup to push for maximum participation.

• Complete RFI-RFQ’s

Scoring the suppliers: Work with client to draft a balance score card to evaluate suppliers based on the 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 • Supplier Profiles • Proposed Shortlist for Audit.

Ongoing Completed

- Stage 1: Supplier Pre-Qualification timeframe. - Project completed in 7 weeks as per scheduled

Delayed

Week 0

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

July 15 –16

July 19 –23

July 26 –30

Aug 2--6

Aug 9--13

Aug 16--20

Aug 23--27

Aug 30 – Sept 03

STEPS

1. Demand Analysis

2. Supply Market Analysis

3. Telephone Pre-screening

4. Develop RFI/RFQ

RFI/RFQ validated

5. Administer RFI/RFQ

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

•

Supplier profiles with recommendations.

Weekly progress report was sent every Friday Finished

Milestones

‒ Extensive supplier data base was built in India and Vietnam leveraging multiple sources of information & from existing DS database.

•

Full sourcing process including building long list of supplier database was done online on the DS e-sourcing tool GSP

‒ 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

Suppliers “Must have” criteria to pass pre-screening.

•

Full sourcing process including building long list of supplier database was done online on the DS e-sourcing tool GSP

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

RFI Score

80%

RFI Ranking

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

‒ Category specific technical questions were added in the RFI to understand supplier production capability and capacity.

− Supply market analysis was shared in the weekly progress and final RFQ report.

Process

Supplier Identification (Completed)

Pre-screening Process (Completed)

RFI/RFQ Administration (completed)

Steps

India

Vietnam

Total

• Suppliers identified

• Supplier passed pre-screening

• Suppliers failed Pre- screening

• Number of RFI/RFQ sent

• Don't intend to respond

• Number of RFI/RFQ received

Supplier rejection analysis was shared with client for each step,

Certified with ISO 13485, but not willing to apply for US FDA 15

Traders/distributors or Importers only Not willing to apply for US FDA and not holding ISO 13485 or equivalent certification

Producing other items such as medical and surgical instruments, etc.. 13 Not interested in direct export or via agent Pre-screening Rejection

Machines are not capable to produce bandages with same/similar dimensions and packaging Producing other type of dressings in cotton only 6 Only producing 1 SKU elastic bandage and their capacity is full for domestic sales Company shutdown for 30 days due to shortage of raw material and lock down RFI/RFQ Rejection © 2021 Dragon Sourcing. All rights reserved.

- Price analysis was shared with the client, #

Category

No. of Maximum Saving Maximum Saving Max saving from quotes % in each SKU $ in each SKU supplier received

Item#

Product name

Bandages 1" x 3"

41%

$ XX

Supplier 6

India

Knuckle Adhesive Bandages 1-1/2"x3"

55%

$ XX

Supplier 3

India

Fabric Adhesive Bandage

Country

Premium Elastic Bandage w/Self- Closures

Elastic Bandage 3” x 5yard

$ XX

Supplier 1

India

Non-Sterile Conforming Bandage

Conforming Bandage 3” x 4.1yard

$ XX

Supplier 2

Vietnam

Non-Woven Triangular Bandage

Triangular Bandage

62%

$ XX

Supplier 2

Vietnam

Sterile Non-Adherent Pads

Non adherent dressing, 3"x4"

27%

$ XX

Supplier 2

Vietnam

Sterile Hydrogel Burn Dressing

Burn Dressing 4"x4"

53%

$ XX

Supplier 3

India

Nonwoven dressing 2"x2", 4 Ply

57%

$ XX

Supplier 2

Vietnam

67%

$ XX

Supplier 2

Vietnam

64%

$ XX

Supplier 2

Vietnam

70%

$ XX

Supplier 2

Vietnam

76%

$ XX

Supplier 1

India

XX 7

Sterile Non-Woven Sponges

Gel Blister & Burning Dressing

Nonwoven dressing 2"x2", 4 Ply Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply Glacier Gel Blister & Burning Dressing

Maximum Saving Savings No savings

- Price analysis was shared with the client, - FOB price comparison. Maximum Saving Savings

Category

Fabric Adhesive Bandage

Premium Elastic 2 Bandage w/SelfClosures Non-Sterile 3 Conforming Bandage Non-Woven 4 Triangular Bandage Sterile Non5 Adherent Pads Sterile Hydrogel 6 Burn Dressing

Item # XX

Bandages 1" x 3"

$ XX

-XX %

$ XX

XX %

$ XX

-XX %

$ XX

- XX %

Knuckle Adhesive Bandages 11/2"x3"

$ XX

-XX %

$ XX

XX %

$ XX

- XX %

Elastic Bandage 3” x 5yard

$ XX

-XX %

$ XX

- XX %

$ XX

-XX %

$ XX

-XX %

$ XX

- XX %

$ XX

- XX %

Conforming Bandage 3” x 4.1yard

$ XX

-XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

Triangular Bandage

$ XX

-XX %

$ XX

- XX %

$ XX

XX %

$ XX

-XX %

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

-XX %

$ XX

-XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

-XX %

$ XX

-XX %

$ XX

- XX %

$ XX

XX %

$ XX

-XX %

$ XX

-XX %

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

XX %

$ XX

-XX %

$ XX

-XX %

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

XX %

$ XX

-XX %

$ XX

40%

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

$ XX

XX %

$ XX

42%

$ XX

- XX %

$ XX

- XX %

$ XX

- XX %

$ XX

-XX %

$ XX

- XX %

XX XX XX

XX 7

Sterile NonWoven Sponges

Gel Blister & Burning Dressing

Product name

Non adherent dressing, 3"x4" Burn Dressing 4"x4" Nonwoven dressing 2"x2", 4 Ply Nonwoven dressing 2"x2", 4 Ply Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply Glacier Gel Blister & Burning Dressing

CONFIDENTIAL

# 1 2 3 4 5 6 7 8 9 Supplier name Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Country India Vietnam India Vietnam India India India India India No. of SKUs offered 12 8 9 4 8 2 12 7 5 Client No. of FOB FOB FOB FOB FOB FOB FOB FOB FOB buying quotes Diff % Diff % Diff % Diff % Diff % Diff % Diff % Diff % Diff % Price/PC Price/PC Price/PC Price/PC Price/PC Price/PC Price/PC Price/PC Price/PC Price/PC received

Revised offer

Target price given and waiting

Not willing to revise

Revised offer

Not willing to revise

Revised offer

Not willing to revise

Maximum Saving Savings No savings

- Spend and saving analysis was shared with the client, Maximum Saving Savings

# Supplier name

1 Supplier 1

2 Supplier 2

3 Supplier 3

4 Supplier 4

5 Supplier 5

6 Supplier 6

7 Supplier 7

8 Supplier 8

9 Supplier 9

No savings

Country No. of SKUs offered Total Savings in $US

India

Vietnam

India

Vietnam

India

$ XX

No Savings

Client Annual Spend Volumes value

Diff %

Savings in $US

Spend value

Diff %

$ XX

XX %

$ XX

XX %

$ XX

Knuckle Adhesive Bandages 1-1/2"x3"

$ XX

XX %

$ XX

XX %

Elastic Bandage 3” x 5yard

$ XX

XX %

$ XX

XX %

$ XX

Conforming Bandage 3” x 4.1yard

$ XX

XX %

$ XX

XX %

$ XX

Triangular Bandage

$ XX

XX %

$ XX

XX %

Non adherent dressing, 3"x4"

$ XX

XX %

$ XX

Burn Dressing 4"x4"

$ XX

XX %

$ XX

Nonwoven dressing 2"x2", 4 Ply

$ XX

XX %

$ XX

Item#

Product name

Bandages 1" x 3"

XX 2

Nonwoven dressing 2"x2", 4 Ply

Gauze Sterile, Nonwoven dressing 4"x4", 4 Ply

Glacier Gel Blister & Burning Dressing

CONFIDENTIAL

Spend value

Savings Spend in $US value

Diff %

Savings in $US

Spend value

Diff %

Spend value

Diff %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

XX %

$ XX

Diff %

Savings Spend in $US value

Savings Spend Savings Diff % in $US value in $US

Savings Spend in $US value

Diff %

Spend value

Diff %

$ XX

Total Spend value

XX $ XX

$ XX

Revised offer

Target price given and waiting

Not willing to revise

1000000

Revised offer

Not willing to revise

Revised offer

Not willing to revise

Shortlisted

Could be considered Not shortlisted

SUPPLIER 9

SUPPLIER 8

SUPPLIER 7

SUPPLIER 6

SUPPLIER 5

SUPPLIER 4

SUPPLIER 3

SUPPLIER 2

SUPPLIER 1

Suppliers Assessment, - Suppliers were assessed and ranked based on their Company profile,

India Suppliers location was shown on the map.

RFI Scoring

Supplier name

City

Province

Supplier 1

Delhi

Supplier 2

Punjab

Supplier 4

Supplier 6

Supplier 7

Supplier 8

Supplier 9

Shortlisted Could be considered Not shortlisted

Executive summary with key information was shared with the client, RFQ

RFI RFI Score Ranking %

Supplier

Years Number Can offer for % of of Bandages Country export export employ & experi sales ees Dressing ence

Major Producing items

Certification

Willing to # of offer a SKU's Total Offered complete offered Savings same as per medical kit from total in $US client specs 12

FDA certified

Quality management & others

Supplier 1

India

650

100%

Both

Medical disposable & wound care items

Yes, already producing medical kit

Yes

ISO 9001, ISO 13485, GMP, CE & CDSCO

Supplier 2

India

50%

Both

Surgical dressings, bandages, plaster etc

Yes

ISO 13485 & GMP

Supplier 3

Vietnam

726

15%

Both

Sterile non woven sponges & dressing

Yes

ISO 9001, ISO 13485 & CE

Supplier 4

India

Supplier 5

Vietnam

Supplier 6

India

Supplier 7

India

Supplier 8

India

Supplier 9

India

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

Conclusions ✓ Whole project was carried out in 7 weeks with total 77 suppliers identified from India and Vietnam. ✓ All the suppliers responded to the RFI-RFQ process were certified with ISO 13485 & other relevant certifications. ✓ All the shortlisted suppliers were FDA certified. ✓ Savings were achieved from several suppliers with highest saving from Indian supplier based on 12 SKU’s about $ 200K. ✓ Potential savings in each of the SKUs with maximum saving of 76% for item Gel Blister & Burning Dressing. ✓ Overall based on stage 1 report, It helped client to identify potential & price competitive suppliers. ✓ Sampling process was initiated with the recommended suppliers. ✓ A plan was framed to audit the recommended suppliers as a next step post sampling.

** Dragon Sourcing has experienced team for performing Technical and Social Corporate Responsibility (CSR) audit or hybrid model combing both.

Bandages and Dressing Sourcing Project – Case Study

Articles inside

XX Bandages 1" x

Sterile Hydrogel Burn Dressing XX Burn Dressing 4"x4"