Cooling Towel Sourcing Project - Case Study

Cooling Towel Sourcing Project
Case Study
Dragon Sourcing - 龙源
Delivering sustainable sourcing value from emerging markets
© 2020 Dragon Sourcing. All rights reserved.

2
Agenda
1. Sourcing Project Introduction
2. Sourcing Approach
3. Conclusions

Objectives and approach
Context
Client Introduction:
• Client is leading German Company providing
corporate gifting for their clientele in Europe.
Project Objectives:
• Shortlist potential suppliers from DS existing
supplier database manufacturing microfiber towels.
Category
Microfiber Cooling towel
Geographical scope:
China.
Dragon Sourcing approach in 3 stages:
Stage 1: Supplier Pre-Qualification
Stage 2: Selection & Contracting
Stage 3: Procurement Operations
Deliverables under stage 1
• RFI-RFQ template
• RFI-RFQ analysis report
• Manufacturer profiles with rankings including
factory and product pictures.
• DS Recommendation on next steps
3

4
3. Conclusions
Agenda

• Demand analysis to define and
understand the product and key
requirements
• Supply analysis to identify list of
potential suppliers
• Telephone pre-screening based
on agreed simple criteria
• Develop RFI/RFQ template
• Conduct RFI/RFQ administration
• Analyze RFI/RFQ responses and
issue RFI-RFQ report
• Recommend suppliers for next
phase
• Recommend suppliers for sampling
• Send original samples to the pre-
shortlisted suppliers.
• Sample development from final list
of suppliers & testing.
• Negotiation, contracting and final
selection.
Supplier Pre-Qualification Selection & Contracting Procurement Operations
• Manage P/O and agree payment
terms and details.
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage payments
• Manage supplier performance
• Monitor new sourcing opportunities
Keyactivities
Following STEPS were covered for end to end sourcing,
PHASE 1 PHASE 2 PHASE 3

Steps Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
1. Demand Analysis
2. Supply Market Analysis
3. Telephone Pre-screening
4. Develop RFI/RFQ
5. Administer RFI/RFQ
6. Analyze RFI/RFQ Responses
7. Original sample sent to shortlisted suppliers
8. Sample developed from shortlisted suppliers.
1
Supplier qualification & selection process was completed in 6 weeks,
Supplier profiles with
recommendations.
© 2020 Dragon Sourcing. All rights reserved. 6
2
Samples developed
and approved.

Demand Analysis,
- Quotes were collected based on solid color and printed design with volume as per min
10,000 PCS to maximum 80,000 PCS.
Product name Product picture Material Description
Estimated pilot
order quantity
Instant
Cooling
Microfiber
Towel
Solid Colors
Material:
55% Polyamide &
45% Polyester and
• Size 100 x 30 cm,
• GSM 170
• Weight 52 gram of the towel
• Packaging: Single packing a in plastic
zipper bag.
• Plastic Packaging + Carabiner in towel
color with rounded edges and Inlay Card
with product information
• Special Function: Loop to hang up the
towel and can also be used as care label
80,000
PCS
Instant
Cooling
Microfiber
Towel
Overall Digital
Print
Material:
60% Polyamide &
40% Polyester
80,000
PCS

‒ As a first step, potential suppliers were shortlisted from existing DS database.

Suppliers “Must have” criteria to pass pre-screening.
‒ Pre-screening process was initiated after receiving client validation,
‒ This process was to filter the list of identified suppliers prior moving them to
the RFI-RFQ step.

10
Post pre-screening the suppliers,
RFI-RFQ process was administered to filter out most capable suppliers.

11
Post pre-screening the suppliers,
RFI-RFQ process was administered to filter out most capable suppliers.

12
‒ Category specific technical questions were added in the RFI relevant to the to
understand supplier production capability and capacity.

80 78 71
61
53
33
28
79% 69% 69% 67% 67% 61% 58%
0%
25%
50%
75%
100%
0
20
40
60
80
100
China
Supplier 4
China
Supplier 1
China
Supplier 3
China
Supplier 9
China
Supplier 2
China
Supplier 6
China
Supplier 10
RFI Result chart: All markets, All sections
Certificate,documents and pictures Social responsibility Quality management
Production Business information RFI Score
RFI filling rate
Shortlisted
Could be considered
Not shortlisted
RFI filling rate
RFI
score
Suppliers Assessment,
Suppliers were assessed and ranked based on the Company profile,
Scoring and ranking of the suppliers are done on the GSP,

14
Location of the Suppliers Marked
Shortlisted
Could be considered
Not shortlisted
No Supplier name City Province Country
1 Supplier 1 XX XX China
Manufacturer locations were highlighted in the map

15© 2020 Dragon Sourcing. All rights reserved.
RFQ – Price Analysis
- Price were collected based on min 10,000 PCS and maximum 80,000 PCS.
# 1 2 3 4 5 6 7 8 9 10
Supplier name Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10
Country China China China China China China China China China China
Product name
Dimension
in cm
(L x W) &
Weight
Order
qty in
PCS
FOB Price in $US/PC
Instant Cooling
Microfiber Towel
Solid Colors
100 x 30 cm.
Net weight
52 gram
170 GSM
10,000
PCS
XX XX XX XX XX XX XX XX XX XX
80,000
PCS
Instant Cooling
Microfiber Towel
Overall Printed
10,000
PCS
80,000
PCS
Recommended suppliers
Shortlisted
Could be considered
Not shortlisted

Supplier company profiles as per ranking wise was shared in the final RFQ report
with recommended suppliers for moving them to next phase of sampling.
RFI Score 69
RFI Ranking 2

requirements
potential suppliers
phase
selection.
terms and details.
• Manage payments
Keyactivities
Phase 2: Suppliers were selected for sampling process.
PHASE 2PHASE 1 PHASE 3

18
- High quality printed samples were developed from the shortlisted suppliers within short period of time,
- Contract was awarded to the supplier with sample approved and after final negotiation.

requirements
potential suppliers
phase
selection.
terms and details.
• Manage payments
Keyactivities
Phase 3: Post PO management was agreed with the client.
PHASE 3PHASE 1 PHASE 2

- Proforma Invoice was raised to the client under buy/resell model,
- Purchase order was awarded to the shortlisted supplier post negotiation,
Proforma Invoice Purchase Order

- Production schedule was shared with the client with regular update on each of
process and sample validation.
TOTAL ORDER QTY: 80,000 PCS
Production Schedule follow up
Activity Name Process dates Process
Projected Completion
date
Actual Completion date
Purchase Order Received Date XX
Fabric knitting XX XXFabric / Yarn Purchase Start XX
Fabric / Yarn Purchase End XX
PP sample XX Submit for approval XX XX
QC Raw Materials XX XX XX
Production Start Date XX XX XX
Colour Approval XX
Kniting XX XXFirst Piece Approval - Fabric XX
Knitting End dt XX
Fabric Cutting Start Date XX
Fabric cutting XX
Cutting End date XX
Trims- wash care label Start date XX
Trims & Accessories XX XX
Trims- wash care label complete date XX
Zipper bag - Start date XX
Zipper bag - complete date XX
Carabiner Start date XX
Carabiner complete date XX
Trims & Accessories Approval Submission to Buyer
Already approved
Trims & Accessories - Approved Date from Buyer
Trims & Accessories Bulk Order Date(Stitching and Packing) XX
Trims & Accessories Bulk Order Received Date XX
Production Inspection at 20% (16,000 PCS) XX XX XX
Test Sample Submission to Int.LAB XX
Sample testing XX XX
Testing Report From Int LAB XX
Stitching Start XX
Stitching process XXStitching 1 st pcs XX
Stitching end XX
Packing Start XX
Packing XX XX
Packing End XX
Final Inspection XX Final Inspection XX
Packing List Information XX Packing List Information XX
Shipment date (80000 PCS) XX Ex-factory shipment date XX
Container loading Supervision XX Inspection
Billing/Documentation Documents sending date
ETD Date by Train XX Cut-off delivery date XX
ETA Germany XX XX

- Bulk fabric was tested to check several parameters including colour fastness &
composition percentage.

- Final QC inspection and container loading supervision with third party was arranged by
Dragon Sourcing and results were PASSED.

24
3. Conclusions
Agenda

Conclusions
 Supplier qualification and sampling process was completed within 6 weeks.
 High quality samples were developed following original sample within a short period of time.
 Shortlisted suppliers for sampling were credential with the Oeko-tex certification and
production capability as per client mandatory requirement.
 Shortlisted supplier was awarded with the contract post price negotiation, production lead
time, payment terms and others.
 Overall based on DS strategic sourcing process, It helped client to place order on time with
high savings and samples to showcase.
• Dragon Sourcing provide and end-to-end service from Procurement Intelligence through
to Procurement Operations
• A business model which ensures that we work exclusively for the benefit of the buyer
24© 2020 Dragon Sourcing. All rights reserved.

Cooling Towel Sourcing Project - Case Study

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