Tubular Components Case Study – Dragon Sourcing by john williams

Dragon Sourcing - 龙源 Delivering sustainable sourcing value from emerging markets

Tubular Components Case Study

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

Objectives and approach Context Client Introduction: • Client is a leading retailer/importer of commercial vehicle spare part business based out of UK Project Objectives: • Identify and recommend new potential competitive supplies manufacturing Tubular Components. Geographical scope: India.

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 Deliverables: • Supplier database • RFI-RFQ template • RFI-RFQ analysis report • DS Recommendation on next steps

Demand Analysis, - Total 10 SKU’s of Tubular Components were shared by the client for this project #

Part#

Product name

Estimated Annual Volumes

Current buying Price (FOB)

Annual Spends value

PF50-0100

P Post Lift Old Version

2000

PF50-0102

P Post Foot Operated

PF50-0103

P Post O/S Crank

PF50-0104

P Post N/S Crank

PF50-0202

Standard Cranked Post O/S

PF50-0203

Standard Cranked Post N/S

PF50-0204

40mm Straight Post

PF50-0205

Standard Straight Post

PF50-0206

Hinged Straight Post

PF70-0911

Wheel Chock

2000

Total yearly spends value

- Reference Product Pictures

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

- Following were the steps 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, target price delivery destinations of delivery/consumption). If possible, collect samples of the products in order to ensure potential suppliers fully understand them Supply Market Analysis Identify list of potential manufacturers in India by leveraging B2B websites, DS database, fair catalogues, Chamber of Commerce, magazines, network, references. Telephone Pre-screening Selection of manufacturers to be included in the RFI/RFP process by telephone pre-screening based on agreed simple criteria (e.g., capability to make the product, minimum company size, interest in participating) 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 manufacturers, including background, financial, client and product experience, quality certification & processes, social responsibility, manufacturing/ technology capability, R&D capability. Administer RFI/RFQ: The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant manufacturers, with telephone follow-up to push for maximum participation.

Deliverables • Kick-Off Report

• Supplier Long List • Shortlist for RFI-RFQ process

• RFI-RFQ Template

• Completed 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 document

Analyze RFI/RFQ Responses: Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report, which profiles & objectively ranks the manufacturers by capability and competitiveness, including a recommendation for those to be audited.

• RFI-RFQ Report.

Ongoing Completed

- Stage 1: Supplier Pre-Qualification timeframe. - Project completed in 5 weeks as per scheduled STEPS

Week 0

Delayed

Week 1

Week 2

Week 3

1. Demand Analysis

2. Supply Market Analysis

3. Telephone Pre-screening

4. Develop RFI/RFQ

5. Administer RFI/RFQ

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

•

RFI/RFQ validated

Week 4

Week 5

Supplier profiles with recommendations.

Weekly progress report was sent every Friday Finished

Milestones

- 55 suppliers were identified from all over India 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

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

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

•

Full sourcing process including pre-screening the suppliers was done online on the DS e-sourcing tool GSP

Supplier Profile example • •

Post pre-screening the suppliers, RFI-RFQ process was administered only with the suppliers passed pre-screening

ier P l p p Su

amp x e rofile

RFI Score

RFI Ranking

des i l s w l e fe

Supplier Profile example

RFI process was administered to filter out most capable suppliers

ate tific r e es it c bm pictur u s st ry mu facto r e i pl t& Sup roduc p

Supplier Profile example

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 report,

India

Total

• Suppliers identified

• Supplier passed pre-screening

Process

Supplier Identification

Steps

Pre-screening (Completed) • Suppliers failed Pre- screening

• Don't intend to respond

• Only RFI received

• Number of RFI/RFQ received

• Number of RFI/RFQ sent

RFI/RFQ Administration (Completed)

rom f ta Da

tua c A the

ort p e l R XX

Supplier rejection analysis was shared with client for each step, 1 1 3 11

Focusing on construction or heavy fabrication work only Cannot Export Unable to contact/Company Shutdown Not interested Duplicate supplier Traders or distributors only, Pre-screening Rejection

Focusing on construction or heavy fabrication work only Cannot Export Unable to contact/Company Shutdown Not interested Duplicate supplier Traders or distributors only,

RFI Ranking

Shortlisted Could be considered Not shortlisted

- Price analysis was shared with the client, #

Supplier name

Supplier 9

Supplier 2

Supplier 1

Supplier 4

Supplier 8

Supplier 5

Supplier 7

Supplier 6

Supplier 3

Supplier 10

Country

India

RFI Ranking

Client FOB FOB Price/ Price Unit in £

Diff %

FOB Diff % FOB Diff % FOB Diff % FOB Diff % FOB Diff % FOB Diff % FOB Diff % FOB Diff % FOB Diff % AVG Price Price Price Price Price Price Price Price Price

Part#

Product name

PF700911

Wheel Chock

PF500102

P Post Foot Operated

PF500100

P Post Lift Old Version

PF500204

40mm Straight Post

PF500103

P Post O/S Crank

PF500104

P Post N/S Crank

PF500206

Hinged Straight Post

PF500205

Standard Straight Post

PF500202

Standard Cranked Post O/S

PF500203

Standard Cranked Post N/S

Below Client Buying Price

Below Average

Above Average Maximum

RFI Ranking

Shortlisted Could be considered Not shortlisted

- Spend analysis was shared with the client, #

Supplier name

Supplier 9

Supplier 2

Supplier 1

Country

India

RFI Ranking

Annu Client al Annual Spends Saving Spends Saving Spends order spends value s value value s value value qty in £

4 5 6 7 8 9 Supplier Supplier 8 Supplier 5 Supplier 7 Supplier 6 Supplier 3 4 India India India India India India 4

Savings value

Spends Spends value value

10 Supplier 10 India

Spends value

Part#

Product name

PF700911

Wheel Chock

2000

PF500102

P Post Foot Operated

PF500100

P Post Lift Old Version

PF500204

40mm Straight Post

PF500103

P Post O/S Crank

PF500104

P Post N/S Crank

PF500206

Hinged Straight Post

PF500205

Standard Straight Post

PF500202

Standard Cranked Post O/S

PF500203

Standard Cranked Post N/S

2000

Total Spend value + Savings

Maximum

RFQ Price Analysis, - Sampling cost and sampling lead time shared in the RFQ Report #

Supplier name

Supplier 9

Supplier 2

Supplier 1

Supplier 4

Supplier 8

Supplier 5

Supplier 7

Supplier 6

Supplier 3

Supplier 10

Country

India

Total Sample cost

Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead Sampl Lead e cost time e cost time e cost time e cost time e cost time e cost time e cost time e cost time e cost time e cost time

Part#

Product name

PF700911

Wheel Chock

£30.0 3 £13.2 3 £18.1 2 0 weeks 0 weeks 4 weeks

PF500102

P Post Foot Operated

£50.0 2 £37.9 3 £43.5 2 0 weeks 2 weeks 9 weeks

PF500100

P Post Lift Old Version

£50.0 2 £24.6 3 £26.6 2 0 weeks 4 weeks 0 weeks

PF500204

40mm Straight Post

£25.0 2 £17.8 3 £22.6 2 0 weeks 1 weeks 9 weeks

PF500103

P Post O/S Crank

£40.0 2 £19.3 3 £24.4 2 0 weeks 7 weeks 1 weeks

PF500104

P Post N/S Crank

PF500206

Hinged Straight Post

PF500205

Standard Straight Post

PF500202

Standard Cranked Post O/S

PF500203

Standard Cranked Post N/S

Shortlisted Could be considered Not shortlisted

Suppliers Assessment, - Suppliers were assessed and ranked based on their Company profile, 100 82 90 80

77 70

4 2

Supplier RFI Score

70 60

3 33

66 61

3 18

40 30

3 19

37 24

19 20

25 13

Quality management Certificate, documents and pictures

1 16

20 10

Business information Total

13 7

India

Shortlisted Could be considered Not shortlisted

Suppliers location was shown on the map. RFI Scoring

Supplier name

City

Province

Supplier 1

Bhilai

Chhattisgarh

Supplier 2

Hyderabad

Telangana

Supplier 3

Pune

Maharashtra

Supplier 4

Supplier 5

Supplier 6

Supplier 7

Supplier 8

Supplier 9

Supplier 10

Executive summary with key information was shared with the client, Key Production Process In-House

RFI RFI Score Ranking %

Shortlisted Could be considered Not shortlisted

Supplier

Number of Company type employe es

Major Producing items

Type of Type of welding in- cutting Inhouse house

RFQ

Certification

Surface treatment in-house

# of SKU's offered from total 10

Total Spend Value

Negative Savings

No. SKU's with savings

Social Quality Compliance management & Certification others

Supplier 1

535

Both Producer and fabricator

TIG, MIG & Robotic

Plasma cutting

Passivating

All

ISO 14001 & OHSAS 18001

ISO 9001

Supplier 2

475

Both Producer and fabricator

TIG, MIG & Robotic

Press cutting

Passivating

All

ISO 14001 & OHSAS 18001

ISO 9001

Supplier 3

Supplier 4

Supplier 5

Supplier 6

Supplier 7

Supplier 8

Supplier 9

Supplier 10

Spend value

Minimum

Below Average

Above Average

Maximum

Agenda

Sourcing Project Introduction

Sourcing Approach

Conclusions

Conclusions  Whole project is carried out in 5 weeks with total 55 suppliers identified  All the recommended suppliers are certified with ISO 9001 certification with key production process in-house.  Received offer on all the 10 SKUs from the RFI/RFQ respondents  Achieved annual savings up to 20%  Sampling process was initiated with the recommended suppliers.  A plan was framed to audit the recommended suppliers as a next step post sampling.  Overall based on our report, It helped client to identify potential & price competitive suppliers ** Dragon Sourcing has experienced team for performing Technical and Social Corporate Responsibility (CSR) audit or hybrid © 2021 Dragon Sourcing. All rights reserved. model combing both.