kitchenware for brazil case

© 2010 Dragon Sourcing. All rights reserved.

Kitchenware for Brazil Case Study

May 2010

Dragon Sourcing - 龙源 Your Tailored Sourcing Approach to Asia


Agenda

1. Our offerings and approach

2. Case Study: Lock Lids

3. Client & DS Partnership


Company Introduction

• The Client is a South American based division of a French multinational in the glass manufacturing industry. This multinational has become a market leader in several industrial branches, and is among the 100 largest industrial companies in the world.

• In the spring of 2009, their purchasing group approached Dragon Sourcing to embark on a spot-sourcing initiative in China to procure several kitchenware items to complement its existing product line. As a result of this first successful experience buying from China, the Client has decided to embark on a long-term partnership with Dragon Sourcing in order to pursue new sourcing activities with a larger number of product categories.


• Shortlist suppliers based on RFI/RFP process

• Audit shortlisted suppliers

• Select 2-3 suppliers for sample development process

• Manage sample development process

• Conduct final negotiations and select suppliers

• Finalise Contract

• Analyse spend category in detail– Specifications and quality

requirements– Volumes– Deadlines

• Analyse supply market and identify potential suppliers

• Pre-qualify potential suppliers through an RFI process

• Manage RFP process with pre-qualified suppliers

• Analyse supplier responses and calculate fully delivered price (logistics, import duties,..)

• Develop Business case and implementation plan

Dragon Sourcing service offering covers the end-to-end sourcing process

Feasibility Analysis Supplier Selection and Contracting Procurement Operations

• Manage P/O and agree payment terms and details (L/Cs,..)

• Check in process production quality

• Conduct pre-shipment QC

• Arrange logistics

• Manage supplier performance

• Monitor new sourcing opportunities

Key

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Agenda






















• Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)




Key

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© 2010 Dragon Sourcing. All rights reserved.© 2010 Dragon Sourcing. All rights reserved.

The first step is to develop a comprehensive understanding of the need and of the functional requirements

Product Name Set of 3 PP Lock Lids Product Picture

Yearly Quantity 100,000 ~ 200,000 pcs of each

　

Quotation FOB Price

Sizes

Small bowl 0.5 L

Medium bowl 1 L

Big bowl 2 L

Color Lid: Transparent Silicone ring: color TBDReceived Client QC specs

Description LogoLeak seal

Packaging Bulk Packaging

HS Code 39241000


Then, an RFI/RFP process is administered to filter out most capable suppliers

Request For Information 征询单Confidential 保密

To 收件人:Email 电子邮件:Tel number 电话:Mobile 手提电话Fax number 传真:

SUPPLIER NAME 公司名称

Adress 地址- 街道City 城市Province 省Zip code 邮政编码Contact person 联系人Job title 头衔email 电子邮件Phone number 电话Fax number 传真Website 网址

Which year was your company founded?贵司是在哪一年成立的？Ownership所有权Capital in million RMB固定资产（百万人民币）What is the workfloor size (m²)?贵司工厂面积有多少平方米？How many employees do you have?贵司员工总数有多少？Do you have a good English speaker and writer in your factory?(Y/N)贵司是否有可用英语进行书面及口语交流的人员？(是/否)How many years have you been in the PP trolley suitcasebusiness?

PP贵司从事拉杆旅行箱生产有多少年？Do you have an export license ?是否持有进出口许可证 ?

Europe USA Others% of turnover exported to出口占销售百分比

CONTACT DETAILS INFORMATION 联系方式

GENERAL INFORMATION 概况

DRAGON SOURCING 龙源有限公司上海代表处Rachel Yao 姚瑛莹

[email protected] - 6141 3974

021 - 6141 3966159 00 89 89 18

BUSINESS INFORMATION 公司规模

Product Name Quantity Material Size Color Accessory Packaging Carton Size (L×W×H)

产品名需求量材料尺寸颜色附件包装纸板箱尺寸

Set 1:

Set 2:

Set 3:

Set of 3 PPtrolley suitcasesPP聚丙烯手推旅行箱3件套

9000套（3件套）

General Information 概述

Product Name Quantity Gross weight percarton(in kg)

Total No.ofset/20'container

Total No.ofset/40'container

Product Size Sample Charge inUS$

EXW US$ price per set FOB US$ price perset

FOB port Delivery Time Payment Term

产品名需求量 /毛重箱（公斤） 20尺柜的装箱量 40尺柜的装箱量产品尺寸 ( )样品费美元 ( )出厂美元单价一套FOB 美元单价(一套)

FOB港口交货时间付款条件

Set 1:

Set 2:

Set 3:

Logistics Information 物流信息

Set of 3 PPtrolley suitcasesPP聚丙烯手推旅行箱3件套

9000套（3件套）

Contact detailinformation

Businessinformation

Product and priceinformation

Logisticsinformation

Designinformation


Non-food Project Control Sheet - PP Trolley

RFPSent

1stFollow

Up

2ndFollow

Up

SupplierName City Re-

gion Date Date Date Date Remark Equivalentproduct

FOB US$Small

FOB US$Middle

FOB US$Large

FOB US$per set

FOBPort

SampleCharge per

set

Production Lead

Time

Supplier 1 Shen-zhen

Guang-dong 21-Nov N/A N/A 20-Nov very professional and

spontaneous 20-Nov US$5.40 US$7.60 US$9.00 US$20.00 Shen-zhen US$50.00 15th

Feb.07

Supplier 2 Wen-lin

Zhe-jiang 17-Nov 20-Nov 21-Nov 20-Nov

Professional supplier,with a competitiveprice; cooperative

20-Nov US$6.48 US$9.12 US$10.80 US$24.00 Ning-bo US$100.00 60-90

days

Supplier 3 Shen-zhen

Guang-dong 17-Nov 18-Nov 18-Nov very professional and

spontaneous 18-Nov US$6.75 US$9.50 US$11.25 US$25.00 Shen-zhen US$100.00 45 days

Supplier 4 De-qing

Zhe-jiang 17-Nov 20-Nov 22-Nov good supplier,

supportive; 22-Nov US$7.02 US$9.88 US$11.70 US$26.00 Ning-bo US$50.00 85 days

Supplier 5 Rui-an Zhe-jiang 17-Nov 20-Nov 21-Nov 20-Nov Missing information

received by 22-Nov 4-Dec US$6.21 US$8.74 US$10.35 US$23.00 Ning-bo US$100.00 45 days

Supplier ContactInformation RFP ReceivedIntend to Respond

Received

During the tender process, the suppliers’ willingness to collaborate and to provide complete and accurate information is also assessed

Lock Lid Project – Control Sheet


Following a RFI/RFQ screening process,7 suppliers have completed RFI.Which 5 suppliers have offered both design and quotation

35

27

62 2 1

9

9

7

5 5 5

0

5

10

15

20

25

30

35

40

45

50

Identified Suppliers Sent RFI/RFQ Intent to Respond Responded to RFI Respnded to RFQ Lid Designs

New Suppliers Trip Suppliers

Selection of potential suppliers

Pre-selected suppliers

Intent to cooperate

Reception of RFI/RFQ &

Design

41

30

5

11

7 7 6























Key

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The supplier selection relies on the short-listed suppliers’ offers, company background and quality of design

2 suppliers out of 6 were selected for the

sampling stage

Suppliers’ quotation

Received Designs

Suppliers’ Profile


First Sample Second Sample

Sampling Process is recommended to make sure the supplier can make compliant products

Supplier A

Supplier B

Final Supplier

Design Stage























Key

act

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Production plan is built to monitor the order and to schedule timely quality inspections

• Based on the claimed production capacity, Dragon Sourcing and supplier agrees on the production schedule

• Sampling and criteria requirements are detailed in a specific document for customer approval. DS sends the criteria list to the supplier for approval.

• 3rd party QC company is contracted to perform:• Early Production QC (~10%)• End of Production QC (~80-90%)• Container Loading Check

• Inspections are documented in a report submitted to customer


QC Reports provide detailed information concerning production quality. Action plans are defined in order to improve product quality


Pictures of Defective


Supplier performance is closely monitored in order to manage the supplier for continuous improvement

• Shipment follow-up document is created to track the supplier’s performance in terms of:

• Timeliness of the delivery• PO qty vs. actual qty• QC inspection results


Agenda





The Dragon Sourcing and Client partnership can be represented in 5 stages

4 Day Supplier Visit

Spot Sourcing

Operational Buying Office

DS & Client Integration

Strategic Buying Office


The DS and Client partnership dates back from May 2009


Spot Sourcing




Assessment of China’s Kitchenware Supplier Market10 factories in 4 days, focused on:

– Plastic Lid– Kitchenware acessories– Opal plate– Ceramics– Gift Box

Assessment of China’s Kitchenware Supplier Market 10 factories in 4 days, focused on:

– Plastic Lid– Kitchenware accessories– Opal plate– Ceramics– Gift Box


Stage 2: Spot Sourcing plan was assigned to DS in June 2009


Spot Sourcing




Shipment History– Lasagna Lid –PO Value: 300,000 USD – 9 40’ containers– Spatula –PO Value: 215,000 USD – 1 20’ container

DS Responsibilities– Identify potential suppliers– Manage sampling process– Final negotiations– Track production– Define QC Criteria List– Schedule Quality Control inspections– Coordinate shipments between supplier, freight forwarder and SG

Other sourcing activities:– Opal Plate: quotation & sampling stage– Metal tong: quotation & sampling stage– Whisk: quotation & sampling stage– Tableware lids: quotation & 2 rounds sampling stage– Paper packaging: quotation stage


Stage 3: In September 2009, DS became Client’s buying office in China


Spot Sourcing




Shipment History– Lasagna Lid: PO Value: 400,000 USD – 11 40’ containers

Attend Sourcing Fairs – October 2009: 3 fairs: Mega Show, Global Sourcing & Canton Fair

• Tableware Glassware: Opal & Tempered• Lids• Accessories: Silicone, Utensils, Spatula set, Fire torch• Others: Paper display, packaging, other glassware

– April 2010: Canton Fair• Silicone set• Plastic Lids• Opal Plate• Tempered Glass tableware - Ambar

Sourcing Activities– Lock Lid: 2 rounds of sampling, choose final supplier, final design phase– Silicone set: sampling stage– Lids: sampling and quotation request phase– Sugar Bowls: collected samples and quotation– Safety Boots: Awaiting specs– Ambar plates: Awaiting specs– Opal Plate: Continuing supplier follow-up


In May 2010, the client invited DS’ Account Manager to Brazil in order to help develop a long-term sourcing plan


Spot Sourcing




Purpose of the visit to integrate Dragon Sourcing with client’s strategic sourcing strategy.

HOW?

DS creating a cross-functional bond with client’s departments: purchasing, marketing, logistics, quality, engineering…

DS understanding the South-American markets

The benefits:

Dragon Souring to provide new product suggestions from the Chinese supplier base.

Accelerate the product development process, hence decrease the time to market process


DS and Client processes are more in


Spot Sourcing




Dragon Sourcing is closely integrated within the company and communicates daily with a number of their departments: Purchasing, Marketing and Quality Assurance

Dragon Sourcing can begin looking for purchase goods from other LCCs like India, Vietnam and Cambodia.

Promote the strength of the Client’s brands to the supply base so they can offer their new product ideas to us.

Continue to build the supplier base and the range of product categories.