Aluminum Die- Casting Case Study

Your Tailored Sourcing Approach to Low Cost Countries
Aluminum die-casting case study
February, 2012

Demand Analysis: heating block and meat mincer
© 2011 Dragon Sourcing. All rights reserved.
Item
description
Product picture
Qty per annum
(in units)
Current US$ FOB
purchasing price
Meat mincer
in aluminum
150,000 US$ X.XX
Heating block
in aluminum
500,000 US$X.XX

3
Project approach
Steps April May June July
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
1
Collect detailed spend information about the category such as technical
requirements, standards applied, material specification, drawings, pictures,
consolidated volume by consuming factories, and current unit prices
2
Collect one representative sample of the products to be sourced in our Shanghai,
HCMC, Mumbai and Istanbul offices
3
Identify list of potential suppliers in Vietnam, Thailand, Indonesia, China and
Turkey to include in the RFI / RFQ process
4
Develop the RFI / RFQ to include all key supplier qualification criteria (e.g.:
financial, technology, manufacturing capability, corporate responsibility, quality…)
and quotation requirements
5 Administer the RFI / RFQ process
6
Analyze responses and use balance score carding process together with
management team to rank suppliers and recommend suppliers which client needs
to take through a formal qualification process
7 Jointly develop with our client the structure of the audit report
8
Carry out audits (either alone or jointly with clients auditors or buyers) for the short
listed suppliers that appear attractive and competitive based on RFI/RFQ process
9 Issue audit reports and rank suppliers based on audit and price competitiveness
10
Recommend which suppliers to move to sample development stage and manage
sample development stage
11
Based on sample quality select suppliers with who to enter into final contract
negotiations and support the contract negotiation process
MilestonesStarted FinishedNot-started Delayed
Phase 2: Supplier
qualification (Optional)
SCHEDULE TO BE DEFINED

4
We identified 346 suppliers in China, Thailand, Indonesia, Vietnam and
Turkey and received 27 RFI/RFQs
Intend to
respond
RFI-RFQ
received
RFI-RFQ
sent
Suppliers initially identified
CN 173 THAI 51 IN 40 VN 35 TUR 47
Give up
CN 88 THAI 41 IN 28 VN 15 TUR 25
Intend to respond received
Only RFI received
RFI and RFQ received
19729
346
RFI-RFQ sent
CN 113 THAI 45 IN 36 VN 19 TUR 32
245
14 13
Not Confirmed yet
19
Not received yet
2

5
Reasons for not participating in the RFI-RFQ:
Reasons for not participate China Thailand Indonesia Viet Nam Turkey Total Percentage
Not sent
RFI/RFQ
Contact detail not valid 22 2 0 4 15 43 43%
Only produce stamping or plastic ;
focus on one Industry like
automotive ;produce other metal
products not alu
27 2 2 12 0 43 43%
Not interested in the project 9 0 0 0 0 9 8%
Trading company 2 0 1 0 0 3 3%
Focus on domestic market 0 1 1 0 0 2 2%
Others 0 1 0 0 0 1 1%
Sub Total 60 6 4 16 15 101 100%
Don't intend
to respond
Can not produce ; the products are
complex; focus on other industry 44 24 18 1 6 93 47%
RFI is too complex; not interested in
the project 34 9 5 2 19 69 35%
Can produce but don’t think they can
meet client strict requirements 2 0 0 9 0 11 5%
Have submitted quotes to client earlier
several times 0 0 1 0 0 1 1%
client’s current supplier 1 0 0 0 0 1 1%
Others 7 8 4 3 0 22 11%
Sub Total 88 41 28 15 25 197 100%
Total 148 47 32 31 40 298 -

6
China:
We have received RFI/RFQ from 11 Chinese suppliers
No. Supplier Name Province City Website
RFI/RFQ
Received
(Y/N)
CECED/
GC
received
(Y/N)
Confidential
letter
received
(Y/N)
1 Zhejiang Ningbo Both Y Y Y
4 Zhejiang Ningbo Only RFI N N
6 Zhejiang Taizhou Both Y Y Y
7 Jiangsu Nanjing Both Y Y Y
8 Jiangsu Yixing Both Y Y N
9 Jia ngsu Suzhou Only RFI N N
10 Guangdong Foshan Both Y N N
11 Shandong Qingdao Only RFI N N
Shanghai
Gansu
Jiangxi
Zhejiang
Jiangsu
Guangxi
Hunan
Hubei
Ningxia
Shaanxi
Anhui
Fuji
an
Neimongu
Shanxi Shandong
Sichuan
Yunan
Guizhou
Henan
Jilin
Liaoning
Hebei
Guangdong
Gansu
Heilongjiang
Beijing
Tianjin
Taiwan

7
RFI/RFQ
Received
(Y/N)
CECED/
GC
received
(Y/N)
Confidential
letter
received
(Y/N)
1 Nakornprathom Aomyai Both Y Y Y
2 Bangkok Bangkok Only RFI Y Y
3 Bangkok Bangkok Only RFI N N
4 Samut Sakorn
Amphur
Muang
Both Y N Y
Thailand:
We have received RFI/RFQ from 4 suppliers

© 2011 Dragon Sourcing. All rights reserved. 8
Indonesia:
Tangerang
Bekasi, Bandung,
Karawang Timur, Karawang
Barat
RFI/RFQ
Received
(Y/N)
CECED/
GC received
(Y/N)
Confidential
letter received
(Y/N)
1 West Java Tangerang Both Y Y Y
2 West Java Tangerang - Both Y Y Y
3 West Java Bekasi - Only RFI N N

© 2011 Dragon Sourcing. All rights reserved. 9
Dong Nai
HCM City
RFI/RFQ
Received
(Y/N)
CECED/
GC received
(Y/N)
Confidential
letter
received
(Y/N)
1 Dong Nai Bien Hoa Only FRI N Y
2 HCM City HCM City Both Y Y Y
3 HCM City HCM City Only RFI N N
Vietnam:

10
RFI/RFQ
Received
(Y/N)
CECED/
GC received
(Y/N)
Confidential letter
received
(Y/N)
1 MARMARA REGION BURSA Only RFI N N
2 MARMARA REGION BURSA Only RFI N N
3 MARMARA REGION ISTANBUL Only RFI N N
4 MARMARA REGION ISTANBUL Only RFI N N
5 MARMARA REGION IZMIR Not received yet N N
6 MARMARA REGION KOCAELI Only RFI N N
7 MARMARA REGION KOCAELI Only RFI N N
Turkey:
We have received RFI from 7 suppliers

11
RFI score sum up for 9 Chinese suppliers according to the scoring category
Remark:
-The Chart’s legend is ordered by the ranking of the RFI score.
-We remove the score of “corporate responsibility” and split into other categories
-We indicate the highest and lowest score on the chart to see the gap among suppliers and we found the gap between highest
and lowest score on each category are quite big even more than 50%.

12
RFI score sum up for 4 Thailand suppliers according to the scoring category

13
RFI score sum up for 3 Indonesia suppliers according to the scoring category

14
RFI score sum up for 3 Vietnam suppliers according to the scoring category

15
RFI score sum up for 6 Turkey suppliers according to the scoring category

16
Average score for each country
Remark:
-We use the same tool to scoring the 5 countries’ suppliers.
-The average score of China is the highest 67 points but close to Vietnam and Indonesia.
-Thailand and Turkey get the lower score below 60 points.

17
Meat mincer FOB price and mould cost comparison for 8 Chinese suppliers and 1
Indonesia supplier.
We have cross checked
the price with this supplier,
they can’t decrease in order
to assure the quality
Pls see below remark
area Pls see below
remark area
Chinese
supplier 2
Chinese
supplier 3

18
Heating block FOB price and mould cost comparison for 8 Chinese suppliers
Client
Chinese
supplier 1
Chinese
supplier 2
Chinese
supplier 3
Chinese
supplier 4
Chinese
supplier 5
Chinese
supplier 6
Chinese
supplier 7
Chinese
supplier 8

19
Heating block FOB price and mould cost comparison for 2 Thailand suppliers,
2 Indonesia suppliers and 1 Vietnam supplier
Thailand Indonesia Vietnam
Client

20
China
Recommended Chinese suppliers to take through audit process.
Country China
Supplier name Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6
Province Zhejiang Zhejiang Zhejiang Guangdong Jiangsu Zhejiang
RFI/RFQ received Both Yes Both Yes Both Yes Both Yes Both Yes Both Yes
Main Product
SHARP products,
motorcycle
accessories, lamp
accessory, Medical
device
Boiler parts,
Motorcycle
accessories, Auto
parts
Aluminum die casting
OEC: Auto parts,
furniture, lamp
accessories
Did-casting products
Motorcycle
accessories,
Lamp, gasoline
engine
accessories
Reason for
recommending
• Very aggressive
& cooperative for
doing business
with client
• Know mould very
well.
• High RFI score
but quotation is
too high
• The factory
capability seems
good
• High RFI score
• Have long
experience on die
casting products
•The factory
capability seems
good
• Very aggressive &
cooperative for
doing business with
client
• Good RFI score
• The factory capability
seems good
• Good RFI score
• The price of meat
mincer is good and
heating block very
close to current price
• Very aggressive &
cooperative for
doing business with
SEB
• Main products are
exported
• Quotation is O.K.
• Very aggressive
& cooperative for
doing business
with SEB
• Good price
RFI score 86 points 82 points 75 points 73 points 63 points 60 points
RFI ranking
No.1 in 9 ranked
Chinese suppliers,
and all 25 ranked
suppliers for 4
countries
No.2 in 9 ranked
Chinese suppliers,
and all 25 ranked
suppliers for 4
countries
No.3 in 9 ranked
Chinese suppliers,
and No.4 in all 25
ranked suppliers for
4 countries
No.4 in 9 ranked
Chinese suppliers,
and No.6 in all 25
ranked suppliers for 4
countries
No.5 in 9 ranked
Chinese suppliers,
and No.10 in all 25
ranked suppliers for 4
countries
No.6 in 9 ranked
Chinese suppliers,
and No.11 in all 25
ranked suppliers
for 4 countries
RFQ score 0 point
0 point
(The price is higher
but not too much)
0 point
(The price of meat
mincer is too high)
38 points
0 point (The price are
very close to current
price)
50 points

Aluminum Die- Casting Case Study

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