Pallet Truck Sourcing Case Study – Dragon Sourcing

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Pallet Truck Sourcing - Case Study

Shanghai, 02, Aug, 2021

Agenda

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1.

Objectives and Timeline

2.

Approach

3.

Result

2

Objectives and Approach DS Approach consists in the following work steps:

Context

1.Collect detailed spend information about the nature of the products required (supplier capabilities required, specifications, volumes, drawings, and samples when relevant for all references to be included in the RFI-RFQ process) with all spend data to be provided by client 2.Identify list of potential suppliers in China/Vietnam/Malaysia to include in the RFI process by incorporating existing list of DS potential suppliers, by leveraging the web, external databases and various networks of experts 3.Carry out a phone pre-screening of the suppliers based on maximum 4-5 screening criteria per category (e.g.: min size, having certain quality certification, experience in relevant industry,…) with these criteria to be provided by client 4.Develop the RFI-RFQ – jointly with client – to include all key supplier qualification criteria (e.g.: financial, technology, corporate responsibility, quality certification, MOQ, client references…) and quotation requirements 5.Administer the RFI / RFQ process to ensure as high a return rate as 6.Analyze responses based on qualitative criteria and use a balance score card together with client to rank suppliers and recommend suppliers which client needs to take through a formal qualification process 7.Sampling (stage 2)

Objectives: • To carry sourcing services for pallet trucks in order to develop new competitive suppliers to achieve cost reduction Geographical scope: • Hand hydraulic pallet trucks - Malaysia/Vietnam • Electric hydraulic pallet trucks - China Deliverables: Stage 1 − Supplier shortlist for RFI-RFQ process − RFI-RFQ template/Balanced scorecard − RFQ analysis report − Supplier profiles report − Proposed Shortlist for sampling Stage 2: − Sampling

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3

The RFI/RFQ process (stage 1) was scheduled for 8 weeks with a follow up report sent every Friday.

Not started

Done

In progress

Milestone

Stage 2 (Sampling)

Stage 1 (RFI/RFQ)

Step

Who

1

Demand Analysis

DS

2

Supplier identification

DS

3

Telephone pre-screening

DS

4

Finalize the RFI/RFQ document

Client/DS

5

Administer RFI/RFQ

DS

6

Analyze RFI/RFQ response

DS

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W01 5/28

W02 6/04

W03 6/11

4

W04 6/18

W05 6/25

W06 7/2

W07 7/9

W08 7/16

W09

W10

Agenda

© 2021 Dragon Sourcing. All rights reserved.

1.

Objectives and Timeline

2.

Approach

3.

Result

5

Spend Analysis: 80% of the total spend (EUR 0.5 M) is covered by 14 SKU out of 99

Spend % vs SKU % 100%

Spend %

80%

80% of the spend is covered by 14 procured items (14%)

60%

40%

20%

0% 0%

20%

40%

60% SKU %

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6

80%

100%

Spend Analysis: Top 14 spend pallet trucks #

Item code

Supplier

Lifting drive

Forecast (pcs)

Purchasing unit price (USD)

Annual Spend (USD)

1

XXX

XXX

hand

816

XXX

XXX

2

XXX

XXX

hand

690

XXX

XXX

3

XXX

XXX

hand

390

XXX

XXX

4

XXX

XXX

electric

43

XXX

XXX

5

XXX

XXX

hand

54

XXX

XXX

6

XXX

XXX

electric

21

XXX

XXX

7

XXX

XXX

hand

60

XXX

XXX

8

XXX

XXX

hand

42

XXX

XXX

9

XXX

XXX

hand

16

XXX

XXX

10

XXX

XXX

hand

13

XXX

XXX

11

XXX

XXX

hand

31

XXX

XXX

12

XXX

XXX

hand

23

XXX

XXX

13

XXX

XXX

hand

5

XXX

XXX

14

XXX

XXX

hand

6

XXX

XXX

2,210 • • •

Item 1/2/3 have nearly same spec so the demand can be combined Item 7/8/11/12 have nearly same spec so the demand can be combined After combination, the number of inquired items reduced from 14 to 9

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7

XXX

Spend Analysis: For 3 representative hand pallet, due to high anti-dumping duty from China exported to Europe, we sourced from Malaysia and Vietnam.

Sourcing in Malaysia/Vietnam Current Supplier Name

COO

Combined Forecast (pcs)

Current purchasing price (USD)

Annual Spend (USD)

Pallet truck (load capacity 2t or 2.5t)

XXX

Malaysia

1,896

XXX

XXX

XXX

Pallet truck, 2.5 t, VG / PU, tandem, 1150 mm

XXX

Italy

156

XXX

XXX

XXX

Pallet truck, 2.0 t, PU / PU, tandem, 2000 mm

XXX

Italy

16

XXX

XXX

#

Item code

Product description

1

XXX

2

3

Product pictures

2,068

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8

XXX

Spend Analysis: For other 6 pallet trucks (2 electric trucks, 4 hand trucks), there is no anti-dumping issue from China exported to Europe so we sourced from China.

Sourcing in China #

Item code Product description Product pictures

Current Supplier Name

COO

Forecast (pcs)

Current purchasing price (USD)

Annual Spend (USD)

1

XXX

Pallet truck type Basic with scale, 2 t

XXX

NL

54

XXX

XXX

2

XXX

Pallet truck type X-tra B with scales, 2 t

XXX

NL

5

XXX

XXX

3

XXX

Container tilting device

XXX

CN

6

XXX

XXX

4

XXX

Scissor stacker, electrohydraulic, 1.0 t

XXX

IT

43

XXX

XXX

5

XXX

LIFTER scissor lift truck, 1.0 t

XXX

IT

21

XXX

XXX

6

XXX

Scissor stacker truck hand-hydraulic, 1.0 t

XXX

IT

13

XXX

XXX

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9

142

XXX

Supplier identification: 54 suppliers were identified from China, Vietnam and Malaysia leveraging multiple sources of information & from existing DS database.

Confidential •

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

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10

Supplier pre-screening: This process was to filter the long list of suppliers prior moving them to the ‘Administer RFI/RFQ’

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11

RFI/RFQ administration process: For pre-screening passed suppliers, online RFI created and sent to suppliers from DS GSP platform.

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12

Online score card created according to RFI and used to rank suppliers

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13

Agenda

© 2021 Dragon Sourcing. All rights reserved.

1.

Objectives and Timeline

2.

Approach

3.

Result

14

Total 11 suppliers (10 from China, 1 from Vietnam) submitted RFIRFQ

#

Categories

China

Vietnam

Malaysia

Total

1

# of suppliers identified

30

15

9

54

2

# of suppliers passed in pre-screening

19

2

0

21

3

# of suppliers failed in pre-screening

11

13

9

33

4

# of RFQ sent

19

2

0

21

5

# of RFI/RFQ received

10

1

0

11

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15

Unit Price Comparison - anti dumping items Sourcing in Malaysia/Vietnam RFI score

Combined Current Forecast purchasing (pcs) price (USD)

66

57 Max saving amount (USD)

#

Representative item

Product description

Lifting drive

Current Supplier Name

1

XXX

Pallet truck (load capacity 2t or 2.5t)

Hand

XXX

1896

XXX

XXX

XXX

XXX

XXX

16%

XXX

2

XXX

Pallet truck, 2.5 t, VG / PU, tandem, 1150 mm

Hand

XXX

156

XXX

XXX

XXX

XXX

XXX

53%

XXX

3

XXX

Pallet truck, 2.0 t, PU / PU, tandem, 2000 mm

Hand

XXX

16

XXX

XXX

XXX

XXX

XXX

67%

XXX

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16

Current Spend (USD)

90

Max potential Supplier 1 Supplier 2 Supplier 3 Saving%

Unit Price Comparison – non anti dumping items Sourcing in China RFI Score #

Item code Product description

66

Lifting drive

Forecast (pcs)

66

60

74

65

90

74

57

72

Max Current Max Current saving purchasi Spend Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier Supplier potential supplier amount ng price (USD) 1 2 3 4 5 6 7 8 9 Saving% name (USD) (USD)

1

XXX

Pallet truck type Basic with scale, 2 t

Hand

54

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

62%

XXX

2

XXX

Pallet truck type X-tra B with scales, 2 t

Hand

5

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

74%

XXX

3

XXX

Container tilting device

Hand

6

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

40%

XXX

4

XXX

Scissor stacker, electrohydraulic, 1.0t

Electric

43

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

51%

XXX

5

XXX

LIFTER scissor lift truck fork length 1150 Electric x fork width 540 mm, up to 1,000kg

21

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

55%

XXX

6

XXX

Scissor stacker truck ,hand-hydraulic, 1.0 t

13

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

74%

XXX

Hand

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17

DS propose 3 options to select potential suppliers and items for sampling

Options

1

Option description

# of items covered • • • • • •

Supplier 1: 2 Supplier 2: 1 Supplier 3: 1 Supplier 4: 3 Supplier 5: 1 Supplier 6: 1

- Hand pallet trucks with anti-dumping issue: select supplier 1 and 2 - Non anti-dumping trucks from China: select 3 and 4

• • • •

Supplier 1: 2 Supplier 2: 1 Supplier 3: 5 Supplier 4: 1

2b

Removing Supplier 4 which has advantage of doing 1 item for a small absolute savings of approx. $2000

• • •

3a

All with Supplier 1

3b

Removing Supplier 4 which has advantage of doing 1 item for a small absolute savings of approx. $2000

1

2a

Select lowest cost’s supplier for each item

# of suppliers Sample fee needed needed (USD)

Saving potential

Saving amount (USD)

6

XXX

32%

XXX

4

XXX

26%

XXX

Supplier 1: 2 Supplier 2: 1 Supplier 3: 5

3

XXX

26%

XXX

• •

Supplier 1: 8 Supplier 4: 1

2

XXX

23%

XXX

•

Supplier 1: 8

1

XXX

23%

XXX

2

3

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