Case Study - Blood Collection System in Asia Sourcing by john williams

Dragon Sourcing - 龙源 Your Tailored Sourcing Approach to Emerging Countries

Blood Collection System Asia Sourcing Case Study

September 2015

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

Project Objectives  Introduction: • Client is a Special Health Authority in Europe • Has an ongoing requirement for “Blood Collection Systems” with a value of approximate € 29 Million/annum 

Objectives:

•

To identify who capable Blood Bag System suppliers in Asia, prior to the tender publication. To create awareness with the Asian suppliers for the upcoming Official Journal of the European Union (OJEU) tender and its requirements The key MUST criteria: 1. CE marked as Class IIb medical devices against EU Directive 93/42/EEC. 2. EN/ISO 3826- Part 1, 2 & 3 3. Principles of EU Good Manufacturing Practice: EN ISO 13485



Final deliverables:

•

Supplier identification process was initiated within the Asian Countries to build long list of suppliers.

China

Pakistan

South Japan Korea

India

Taiwan Thailand Vietnam Philippines Malaysia Singapore Indonesia

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

Approach & Schedule, Stage 1: Supplier Pre-Qualification No. Step Deliverables Demand Analysis  Project Requirement 1. Work with client to define and understand the products and requirements (specs, volumes, materials, Questionnaire production technology requirements, Quality tests, Standards, etc.)  Kick-Off Report Supply Market Analysis 2. Identify long list of potential suppliers in the selected markets by leveraging B2B Websites, DS  Supplier Long List Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References. Telephone Pre-screening Selection of suppliers to be included in the RFI/RFP process by telephone pre-screening based on 3.  Shortlist for RFI/RFQ agreed simple criteria (e.g. capability to make the product, minimum company size, interest in participating) Develop RFI/RFQ  RFI/RFQ Template Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre Balanced Scorecard 4. qualify the competitiveness and capabilities of the suppliers, including: Background, financial, Client  Introduction Letter and product experience, Quality certification & processes, Social Responsibility, Manufacturing/technology capability) Milestone 1: RFI/RFQ & Scorecard Approved Conduct RFI/RFQ Administration 5. The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant suppliers, • Completed RFI/RFQs with telephone follow-up to push for maximum participation. Analyze RFI/RFQ Responses  RFI/RFQ Report Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report which profiles  Supplier Profiles 6. & objectively ranks the suppliers by capability and competitiveness, including a recommendation for  Proposed Shortlist for those to be audited/Sampled. Audit/Samples. Milestone 2: Shortlist for Auditing/Sampling Agreed © 2015 Dragon Sourcing. All rights reserved..

The sourcing process was completed in 9 weeks. Not started

Done

In process

Delay

Steps

Duration/week commencing

1. Demand Analysis

2. Supply Market Analysis

3. Telephone pre-screening

4. Develop RFI/RFQ

5. Administer RFI/RFQ process

6. Analyze RFI/RFQ Responses & submit RFQ report.

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Week 9

07-13/ 07-17

07-20/ 07-24

07-27/ 07-31

08-03/ 08-07

08-10/ 08-14

08-17/ 08-21

08-24/ 08-28

08-31/ 09-04

09-07/ 09-11

Supplier recommendations for auditing/sampling.

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

Whole Blood Collection Systems including Leucodepletion Filter (nearly € 27 Million in spend).

System

Whole Blood Collection Systems including Leucodepletion Filters

Top and Top (TAT) Blood collection system for whole blood filtration

Image

Remark

Forecasted Qty Y3 (Systems)*

Nil

1.7 M

Nil

XXX

F E XXXXX

D A B

D E

Bottom and Top (BAT) Blood collection system for red cell concentrates (RCC) filtration

G H

A C B D

F G

Bottom and Top (BAT) Blood collection system for RCC filtration with integral plasma filter (IPF)

A C

Note: This Blood collection system is similar to System 2 with the exception of having a plasma filter and an additional (empty) pack to receive plasma prior to filtration.

XXX

Whole blood collection system without anticoagulant

Note: This Blood collection system is a dry system which contains no anticoagulant.

* Y3 is forecasted for use from 01/05/2015 – 30/04/2016

XXX

Ancillary Blood Processing Systems (Primary Components, nearly € 1.8 Million in spend).

No.

Ancillary Blood Processing Systems (Primary Components)

Forecasted Qty (Sets) Y3

Figure 1 - Quadruple transfer system for the storage of platelets for neonatal use.

6,000

Figure 2 - Quadruple transfer system for the storage of frozen plasma for neonatal use.

XXX

Figure 3 - Quadruple transfer system for the storage of red cells for neonatal use.

XXX

Figure 4 - Sextuplet transfer system for the storage of red cells for neonatal use.

XXX

Figure 5 - Single transfer pack for the handling of waste material or storage of plasma components.

XXX

Figure 6 - Cryoprecipitate pooling system.

XXX

Figure 7 - Single plasma filter system.

XXX

Figure 8 - Double plasma filter system.

XXX

Figure 11 - Platelet storage system.

XXX

Figure 13 - Platelet pooling filter system.

XXX

Figure 14 - Platelet pooling filter system with integral sampling device.

XXX

* Y3 is forecasted for use from 01/05/2015 – 30/04/2016

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

DS identified 142 suppliers in 12 Asian Countries, Indonesia

142 1 3 3 3 4 5 5 5 5 6

Thailand

116

Vietnam

1 3 3 3 3 4 4 5 5 5

Philippines

Singapore South Korea Pakistan

Malaysia

Taiwan

Singapore [VALUE]South Korea [VALUE]

Pakistan [VALUE]

Japan [VALUE] 14 8

Failed phone screening 12

Passed phone screening

Japan China India

116 suppliers failed phone screening process Traders/importer only, not a manufacturer Manufacturing secondary components only, Unable to supply complete blood bag system.

8 6 29 9

Manufacturing (products) do not comply with ISO 3826 part 1, 2 & 3 Products not comply with CE marked as per medical devices directive

7 2 3

Only subsidiary or factory, Requested to contact parent Company or Parent company, requested to contact subsidiary special for blood bag. Contact details not valid/not responding

Suppliers already in contact directly with the client

Stopped making blood bags and/or Company shutdown

An RFI/RFP process was administered to filter out most capable suppliers, RFI/RFQ - Contact info Confidential DS Contact Person Email Tel number Mobile

Dragon Sourcing Mr Pankaj Tuteja pankaj.tuteja@dragonsourcing.com +91- 22- 26365009 + 91- 9867602535 COMPANY INFORMATION

Company Name Address Town Province Company Website

Contact detail information

Do you currently manufacture, or do you have experience of manufacturing blood packs?

Production information

If yes, What type of blood bags do you manufacture? Can you provide high quality transparent medical grade PVC film? Whole Blood collection Transfusion system

Do you offer following manufacturing process? Please provide answer with, • Yes • No

Disposable blood Optimal additive Needles Sample site Bags, Tubes & solutions manufacturing coupler, Filters. Ports

Base Label

Does your company do all production steps in house? If no, please elaborate. Type of machinery, • Fully Automatic • Semi-Automatic • Others Your outsourcing partner (material sub-contractor) comply to EN/ISO 3826- Part 1, 2 & 3? Your outsourcing partner comply to CE marked as Class IIb medical devices against EU Directive 93/42/EEC? Can your company design according to client's requirement?

CONTACT PERSON INFORMATION Contact Person Title Email Tel Fax Mobile phone This RFI/RFQ contains a total of 9 worksheets detailed below: 0. Introduction & Instructions: presentation of the objectives and timetable of the 1. Contact Information: General and contact information about your company. 2. Company Profile: Key business and financial information. 3. Production: Manufacturing capability, Production capacity, etc. 4. Quality Management: Information requested about Certification, Quality control etc.. 5. Factory Pictures: Please provide recent pictures of your factory. 6. RFQ: Request for quotation. Detailed specifications are showed in Annex 1 and Annex 2 © 2015 Dragon Sourcing. All rights reserved.

Equipment or Production line

Yes/No

Producer

Quantity

validated sterilization plant (typically steam autoclaves), Accurate solutions filling equipment, Please list production equipment you will use (others, please specify) labelling equipment Assembly lines (typically automated) Assembly lines (semi-automated) Do you have below certificates ? ISO 9001 Manufacturing QMS

ISO 14001

Quality Management

ISO13485 CE marked as Class IIb medical devices against EU Directive 93/42/EEC. EN/ISO 3826- Part 1: Plastic collapsible containers for human blood and blood components What international/domestic product certification do you have?

EN/ISO 3826- Part 2: – Graphic symbols for use on labels and instruction leaflets EN/ISO 3826- Part 3: – Blood bag systems with integrated features. Principles of EU Good Manufacturing Practice: EN ISO 13485 (Medical devicesQuality management systems) FDA Approved

7 suppliers responded to the RFI-RFQ

Identify Suppliers

Pre-screen suppliers

Analyse RFI/RFQ received

Administer RFI/RFQ

26 1 1 1 1

Singapore South Korean supplier submitted only the Company profile (RFI) & will submit RFQ during the OJEU tender process as they need contact the their outsourcing US partner for providing

19 1 1 1

South Korea

Pakistan

Leucodepletion filter

Japan

1 2

6 India 10

2 4

1 RFI-RFQ sent

Intend To Respond

Donâ&#x20AC;&#x2122;t Intend to respond 15

Only RFI Received

RFI-RFQ received

China

Location of the suppliers responded to the RFI-RFQ #

Supplier name

City

Province

Website

XXX

Sichuan

XXX

Shandong

XXX

Guangdong

XXX

Jiangsu

XXX

Heilongjiang

Jilin Liaoning Xinjiang

Shanxi

Ningxia Qinghai

Beijing Tianjin Hebei

Inner Mongolia

Gansu

Shaanxi

Shandong Jiangsu

Henan Anhui

Xizang Sichuan Sichuan

Shanghai

Hubei

Zhejiang Jiangxi

Hunan Guizhou Yunan

Guangxi

Fujian

Guangdong Hong Kong

Taiwan

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

- Logistics Process: DDP Price Calculation - From FOB China & India to DDP Europe destination.

 Loading on container on manufacturing site

EXW Price

 Container transportation to China sea port Shanghai & Indian sea port Nhava Sheva .  Export documents expenses, transportation & other taxes

FOB Price

 Sea freight from China & India FOB port to XXX in Europe.

 XXX port handling cost & terminal charges

 Additional fees (BAF & CAF)

 Clearance Charges Port Security, etc.

 Insurance cost based on the CFR value.

 Loading cost on truck  Haulage cost to final destination

 Fuel taxes  Port Infrastructure  Import duty fees

DDP Price

 Handling & loading of the container on the vessel

Delivered price until client warehouse

Supplier with highest annual saving was about € 6 million Highest Annual Saving

Country

Supplier

Product #

Client Current Supplier DDP Supplier Annual Supplier Annual Price DDP spend saving (+/-) (Euro/System) (Euro/system) Based on 20 FCL'

# DSCN/BB24 China

Total annual saving € 6.06 M # DSCN/BB30

China

# DSCN/BB28

China

China India India

Euro

1.7 M

Figure 2

€ 3.02

xxx

Figure 3 Figure 4 Figure 1 Figure 3 Figure 4 Figure 1 Figure 2 Figure 3

# DSCN/BB27

Figure 1

# DSIN/BB26 Total annual saving € 0.19 M

Systems (units)

€ 2.60

Total annual saving € 0.24 M

Total annual saving € 0.18 M # DSIN/BB31

20'

Client annual spend

Figure 1

Figure 2 Total annual saving € 3.91 M

Euro (Millions) Euro (Millions)

Client annual volumes

Figure 4 Figure 2 Figure 4 Figure 1

C O N F I D E N T I A L

€ 0.21 € 0.23 € 2.03 € 1.47 € 0.25 € 0.16 € -1.77 € -1.49 0.04 0.20 € -4.90 € -8.03 € 0.18 € -16.33

xxx

C O N F I D E N T I A L

xxx 1.7 M xxx xxx xxx 1.7 M xxx xxx xxx 1.7 M xxx xxx 1.7 M

Figure 1

€ -10.22

Figure 2

€ -11.62

xxx

Figure 4

€ 0.19

xxx

C O N F I D E N T I A L

Supplier with highest annual saving for the ancillary system was € 1.3 million Highest Annual Saving Country

Supplier

Product #

Supplier DDP Price Supplier Annual (Euro/System) spend 20'

# DSCN/BB24

China

Total annual saving € 0.63 M

# DSCN/BB30 China

Total annual saving € 0.36 M

# DSCN/BB28 China

Total annual saving € 1.30 M

# DSIN/BB31 India

Total annual saving € 0.024 M

Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 11 Figure 13 Figure 14 Figure 1 Figure 3 Figure 5 Figure 7 Figure 8 Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 11 Figure 13 Figure 14 Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6

C O N F I D E N T I A L

Euro

C O N F I D E N T I A L

Supplier Annual Client Current DDP saving (Euro/system)

€ € € € € € € € € € € € € € € € € € € € € € € € € € € € € € € € €

Euro

21,795 15,621 15,621 25,769 25,131 64,722 71,014 54,951 49,832 238,528 49,622 20,960 6,625 23,488 163,215 143,297 30,534 24,487 25,901 52,220 26,394 153,818 170,604 170,604 92,880 462,338 93,956 8,145 (4,455) (4,455) (32,264) 16,227 (130,759)

20'

C O N F I D E N T I A L

Client annual volumes

Client annual spend

Systems (units) 6,000 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx 6,000 xxx xxx xxx xxx 6,000 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx 6,000 xxx xxx xxx xxx xxx

Euro

C O N F I D E N T I A L

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

Balance Score card used to rank the suppliers

90 80 70

80 5 4

5 3 8

5 5 6

5 4

Average RFI scoring: 69 from 100

5 2 4

4 3 4

21 25

Submitted only RFI

40 30

# DSCN/BB24

# DSCN/BB30

# DSIN/BB31

# DSCN/BB28

# DSCN/BB27

# DSIN/BB26

# DSSK/BB25

China

India

China

India

South korea

Business information

Production India

Quality system 22

RFQ

Cooperation

Corporate Responsibility

Agenda 1.

Introduction & Project Objectives

Approach & Schedule

Demand Analysis

Supply Markey Survey

Price analysis

Supplier Assessment

Supplier Profile Example

• Section: Business Information COMPANY INFORMATION Company Name

RFI Score

RFI Ranking

Willing to offer DDP price

Yes

Payment terms

30 days from invoice

BUSINESS INFORMATION

DSCN/BB24

Address

XXX

City

XXX

Province

XXX

Company Website

XXX CONTACT PERSON INFORMATION

Contact Person

Turnover Million in Euro

Percentage of turnover distributed to: (%)

2015 (till date)

2014

2013

Domestic

Europe

U.S.

Rest of the world

Customers

Industry

Country

% of sales

XXX

Medical

China

XXX

Medical

China

XXX

Medical

Cuba

XXX

Medical

Germany

XXX

Medical

China

XXX

Title

Marketing Manager

XXX

Tel

XXX

Fax

XXX

Mobile phone

XXX

Top 5 Customers?

BUSINESS INFORMATION

Year Founded Nature of the Company Company type (manufacture, trader)

1994 Private Manufacture

Registration Capital (Euro) Total Employees Main production items

Ever exported any of these items

Factory size (m²) Years of export experience Subsidiary in Europe, Australia & New Zealand Have Account Manager able to communicate effectively in English

Yes

Secondary components like needles, sample site coupler,etc.

Yes

Tes

CORPORATE RESPONSIBILITY & POLICIES

Export License Participated directly in the "OJEU"

Whole Blood Bag Ancillary Blood System Systems

Policies your organization hold. (Yes/No)

Health & Safety Policy

Yes

Environmental Policy

Yes

Quality Policy

Yes

CSR (Corporate Social Responsibility)

Yes

â&#x20AC;˘ Section: Quality Control QUALITY CONTROL Certified with ISO 9001 ISO 14001 Manufacturing QMS ISO13485 Others CE marked as Class IIb medical devices EN/ISO 3826- Part 1: EN/ISO 3826- Part 2 International/domestic product certification EN/ISO 3826- Part 3 Principles of EU GMP: EN ISO 13485 FDA Approved Test UV-visible range spectrophotometer Total organic carbon analyzer High performance liquid chromatography Quality control equipment in-house Electronic analytical balance Automatic optical rotation centrifugal machine mould Incubator Have daily in line quality inspection Type of inspection for finished goods Performance achieve on average in out going quality measures Internal rule for advising time of quality claim Research and development department in-house Accept 3rd party QC Contract Management: Attend the Supplier Liaison Meetings Contract Management: Attend the Framework Review Meetings Test company do with an external supplier Have testing methodology of EN ISO 3826 parts 1 and 3 for the specific chemical, biological and physical tests that must be carried out to validate the production process and batches of blood bags. ÂŠ 2015 Dragon Sourcing. All rights reserved. 25

Yes / No

Date of Certificate

Certifying Org.

• Section: Factory Pictures Factory overview from outside

Office

Raw Material/Finished Goods warehouse

Production Floor

Accurate solutions filling equipment

Assembly lines (semi-automated)

Assembly Floor

R&D/Lab

Page 5 - 5

In summary, a savings potential of 25%

Whole Blood Collection Systems including Leucodepletion Filters,

Identified suppliers with annual savings of € 6 million

Ancillary Blood Processing Systems

Identified suppliers with annual savings of € 1.3 million

Potential Savings

Savings from both Chinese & Indian