Here is a case study by Dragon Sourcing on Electronics Sourcing from consumer goods sector for the year 2014 covering China, Vietnam and Turkey. For details contact: www.dragonsourcing.com

1. Dragon Sourcing
Your Tailored Approach to Emerging Markets
Electronics Sourcing Case Study
China Turkey Vietnam

2. Agenda
1. Objectives
2. Approach
3. Results
2

3. 3
Objectives
Context
Client overall objectives : Identify new potential competitive suppliers in
China, Vietnam and Turkey who can supply items at delivered prices below
current levels (maintain/improve safety, quality and delivery)
Categories involved
• Electronics
Dragon Sourcing approach
1. Demand Analysis: Work with Client to define and understand the
products and requirements (specs, volumes, materials, production
technology requirements)
2. Supply Market Analysis: Identify long list of potential suppliers in
China , Vietnam and Turkey by leveraging B2B Websites, DS Database,
Fair catalogues, Chamber of Commerce, Magazines, Network,
References.
3. Telephone Pre-screening: Selection of suppliers to be included in
the RFI/RFQ process by telephone pre-screening based on agreed
simple criteria (e.g. capability to make the product, minimum company
size, interest in participating)
4. Administer the NDA: Administration and chasing for completion of
the NDA with suppliers that have been preselected
5. Develop RFI/RFQ & Scorecard template: Prepare an RFI/RFQ
document, with an aligned Balanced Scorecard that has the objective to
pre-qualify the capabilities of the suppliers, including: Background,
Financials, Client and product experience, Quality certification &
processes, Social Responsibility, Manufacturing/technology capability
6. Administer the RFI/RFQ: The RFI/RFQ is distributed to the relevant
suppliers who have signed NDA, with telephone follow-up to push for
maximum participation.
7. Analyze RFI /RFQ Responses: Analysis of RFI/RFQ responses to
objectively rank the suppliers by capability and competitiveness, and to
develop sense for price points

4. Agenda
1. Objectives
2. Approach
3. Results
4

5. Total 16 RFQ Items used in China, Italy and Turkey, annual spend €4.75M
5
• Unit price doesn’t include VAT. Euro:CNY=1:8.1
Euro:USD=1:1.32
Euro:TRY=1:2.81
Destination General description Item no Delivery term
Annual
quantity(pcs)
Unit price Annual spend Unit price Annual spend
(Euro) (Euro) (CNY) (CNY)
China
3PH BOARD ASSY LB COMPUT. 18204 € 294,573.82 ￥2,386,047.93
3PH BOARD ASSY WD COMPUT. 10752 € 179,281.45 ￥1,452,179.78
AS.SCH.CUOR SMDRF 3R 5804 30383 € 142,708.03 ￥1,155,935.05
70T72GD ( ODM ) 30000 € 333,333.33 ￥2,700,000.00
7H51G ( ODM ) 30000 € 255,555.56 ￥2,070,000.00
72H55F ( ODM ) 50000 € 333,333.33 ￥2,700,000.00
Italy
3PH BOARD ASSY LB COMPUT. 15660 € 267,169.09 ￥2,164,069.64
3PH BOARD ASSY WD COMPUT. 45600 € 801,109.09 ￥6,488,983.64
AS.SCH.CUOR SMDRF 3R 5804 18404 € 91,462.30 ￥740,844.65
Turkey
FUZZY PCB BWT +NEUTRAL
SOFTWARE
146640 € 850,424.02 ￥6,888,434.53
FUZZY PCB TWT/IT +NEUTRAL
SOFTWARE
10078 € 59,614.39 ￥482,876.59
3DGT PCB THERMAL AMBRA 67152 € 431,008.40 ￥3,491,168.01
3DGT PCB HP RELE AMBRA 34037 € 254,120.24 ￥2,058,373.96
Timer green Ver PCB 7 50000 € 281,060.61 ￥2,276,590.91
Preco Green PCB 7 16000 € 100,848.48 ￥816,872.73
Preco White PCB 7 11000 € 77,083.33 ￥624,375.00
Current Total Annual Spend € 4,752,685. ￥38,496,752

6. Total suppliers 179 identified, 11 RFI/RFQ received ( China 7, Turkey 1, Vietnam 3)
6
Item China Turkey Vietnam Total
Suppliers identified 133 29 17 179
Suppliers called 133 29 17 179
Suppliers passed pre-screening 46 8 14 68
Suppliers NDA received 29 5 8 42
Suppliers RFI/RFQ sent 29 5 8 42
Suppliers RFI/RFQ received 7 1 3 11

7. 7 RFI/RFQ received in China; 1 RFI/RFQ received in Turkey; 3 RFI/RFQ received in
Vietnam
7
Country Supplier name Province
Quote Client
China Italy Turkey
China Supplier 1 Guangdong Y Y Y
China Supplier 2 Guangdong Y
China Supplier 3 Guangdong Y Y Y
China Supplier 4 Guangdong Y
China Supplier 5 Jiangsu Y
China Supplier 6 Zhejiang Y
China Supplier 7 Zhejiang Y
Turkey Supplier 8 İstanbul Y Y Y
Vietnam Supplier 9 HaiDuong Y Y Y
Vietnam Supplier 10 Binh Duong Y Y Y
Vietnam Supplier 11 Binh Duong Y
Xinjiang
Gansu
Jiangxi
Tianjin
Jiangsu
Guangxi
Hunan
Hubei
Qinghai
Ningxia
Sha
anxi Anhui
Fujian
Inner Mongolia
Shanxi
Xizang
Sichuan
Yunan
Guizhou
Henan
Jilin
Liaoning
Hebei
Guangdong
Gansu
Shanghai
Hong
Kong
Taiwan
Heilongjiang
Sichuan
Zhejiang
Shandong
Binh Duong
Hai
Duo
ng

8. Score card analysis for Client China:
- 8 suppliers are ranked with an average score of 71.
- 4 suppliers are above average score.
- DS recommend Client to audit top 4 suppliers
8
Supplier name
Supplier
location
Business
information
Production Quality system
Price
Competitiveness
Total
Rank by score
10% 20% 30% 40% 100%
Supplier 1 China 8 20 27 36 91 1
Supplier 2 China 8 19 14 42 82 2
Supplier 3 Vietnam 8 20 21 28 76 3
Supplier 4 China 10 20 26 16 71 4
Supplier 5 China 8 19 20 22 68 5
Supplier 6 Turkey 10 16 21 16 63 6
Supplier 7 Vietnam 7 16 24 16 63 7
Supplier 8 China 6 20 14 13 53 8

9. Score card analysis:
- 6 suppliers are ranked with an average score of 71.
- 3 suppliers are above average score.
- DS recommend Client to audit top 3 suppliers
9
Supplier name
Supplier
location
Business
information
Production Quality system
Price
Competitivenes
s
Total
Rank by score
10% 20% 30% 40% 100%
Supplier 1 China 8 20 27 36 91 1
Supplier 2 Vietnam 8 20 21 40 88 2
Supplier 3 China 10 20 26 16 71 3
Supplier 4 Vietnam 7 16 24 16 63 4
Supplier 5 Turkey 10 16 21 13 61 5
Supplier 6 China 6 20 14 13 53 6

10. Company profile
Supplier 1 - Vietnam
10
COMPANY INFORMATION
Company Name XXXX Vietnam
Address XXXXXXXXXXXX
Town
Province HaiDuong
Company Website
CONTACT PERSON INFORMATION
Contact Person Mr. XXXXX
Title G.Director
Email
Tel
Fax
Mobile phone
BUSINESS INFORMATION
What date was your company founded? 06/2012
How much is your registration capital (USD)? 2M
What's the nature of your company? (Private,
state owned, joint venture, etc)
Joint venture
What is your turnover in million USD?
2014 ( to date) 2013 2012 2011
0.37 0.59
How many square meters(m²) does your
factory occupy ?
16000m2
How many employees do you have? 40 employees
How many employees can communicate in
English?
5
Worker Engineer R&D
QualityC
ontrol
Manage
ment
Sales
How many people do you have in these
positions?
8 2 1 1 5 1
How long does your employee work in your
company in average?
2 years
How many shift does your company work?
How many hours one shift?
1
Does your company have an export
license ?(yes or no)
Yes
How many years of export experience do
you have?
12 years
What industry does your company mainly
serve?
Assembly and manufacturing of printed circuit board,
electronics devices, household electrical appliances and other
works related to above.
Do you have subsidiaries outside
Vitenam? If yes, where?
Yes, Japan, China
Do you supply products to white goods
industry? If yes, how many years?
Yes,
Percentage of you turn over coming from
white goods Industry? （%）
0.5%
Who is your main customer in white
goods industry?
Panasonic
Do you have European / international
customers? If yes, which ones?
No
What is the percentage of turnover
distributed to:
Domestic Europe US
Rest of the
World
0% 0% 0% 100%
Who are your top 3 Clients? Clients Industry Country % of sales
1
Panasonic
LVBD
Assembly Japan 50%
2 Panasonic PCB Japan 40%
3 Sharp PCB Japan 10%
CORPORATE RESPONSIBILITY
Shortly describe your policy to cover
environment and conservation.
We want to contribute to the protection of the global environment
and environmental protection of the local community
Shortly describe your policy to cover
health and safety.
We always create a lean working environment and always try to
not happen labor accident.
Shortly describe your policy to cover
human rights.
Observance of the cover human rights (employee)
Shortly describe your policy to cover
business ethics and anti-Bribery.
Productivity&Quality-Foundation for Sustainable Development
RFI/RFQ score 76
Rank 3

11. 11
PRODUCTION
What's your main products?
Assembly and manufacturing of printed circuit board,
electronics devices, household electrical appliances
and other works related to above.
How many years of EMS experience do you have? 12 Years over experience
OEM ODM
Do you provide the right listed PCBA service?
(Yes/No)
yes yes
Do you provide the right listed PCBA service for
home appliance industry?
yes yes
Do you provide right listed PCBA servie for control
board of white goods?
yes yes
In White goods industry, which client do you
provide right listed PCBA service?
Panasonic
Does your company produce PCB in house?
(Yes/No)
yes
Does your company do PCBA in house? (Yes/No) yes
Can you source and purchase components for
client? （Yes/No)
yes
Can you support client in product design? Yes/No) yes
What's your capacity utilization？(%) 50%
Please respond to questions for the following
technologies：
In house or
Subcontracted
If in house, please
prvide Brand/Type
If in house,
please provide
number of
Machines
SMT yes
Reflow soldering yes
Wave Soldering yes
Koki Japan/Ws-
302LF
11-096
Wire bonding yes
Worker
Engineer
R&D Quality
Control
Manageme
nt
Sale
s
How many people do you have in these positions? 8 2 1 1 5 1
How many of those speak and write english? 3 1
Can your company design according to client's
requirement?
yes
How long does your employee work in your
company in average?
2
How many shift does your company work? How
many hours one shift?
1 shift
Quality, Environmental and Product Certification
Do you have below certificates ?
Yes / No
Date of
Certificat
e
Certifying
Org.
Manufacturing QMS
ISO 9001 yes
ISO 14001 yes
TS16949 no
OHSAS18001 no
What international/domestic product certification
do you have?
CE no
UL yes
Can your company provide ROHS self declaration and 3rd party test
report? yes
Can your company provide REACH self declaration and 3rd party
test report?
no
Do you have incoming material inspection and report?
yes
What type of inspection to be conducted(100% or sample
inspection)? sample inspection.
If sampling inspection, what is your sampling rate?
AQL(Acceptable Quality Level)
Do you have final products inspection and report?
Yes, we have
What performance do you achieve on average in out going quality
measures (% rejected)?
0.5%
What is your internal rule regarding maximum reaction time of
quality claim? Daily Report
Do you accept 3rd party QC?
yes
How long do you keep the QC records?
10 years
Which test does yor company corporate with an external supplier? NA
Company profile
Supplier 1 - Vietnam

12. 12
Quality, Environmental and Product Certification
Please list
quality control
equipment that you
have in-house
Test
In house test
Equipment (Yes/No)
Test
In house test
eEquipment
(Yes/No)
Test
In house test Equipment
(Yes/No)
Test
In house test Equipment
(Yes/No)
Optical visual
inspection system
yes Crimp Insertion tester no
Thermal shock
test
no
Micrometers of suitable size
and design
yes
Xrf Rohs analyser no 2d Microscopes yes High voltage test yes
digital calipers of suitable
design and size.
yes
Temperature
gauges
yes
Cross cut and
polishing machines
no
Weld monitoring
equipment
yes
Scanning electron
microscope
no
Circuit Test yes
Optical measuring
systems
no
Humidity
recording system
no Bevel protractors no
On board circuit
test
yes Earth leakage test ye
Insulation
resistance test
no Shadowgraph no
Cold temperature
cabinet
no Performance tester yes Insulation tester no Xray testing no
Profile gauges and
templates
yes Glow wire test no Thickness testers yes Surface tables yes
Crimp height
analysers
no Resistance meters yes Emc Test no 3 Axis CMM no
Tracking test no
High temperature
oven
no
Ozone test
chamber
no 3d Micorsopes yes
Company profile
Supplier 1 - Vietnam

13. Company certificate and picture
Supplier 1 - Vietnam
13
Business registration Tax registration Organization Code certificate
Factory entrance Workshop Machinery
Machinery Warehouse R&D

14. Agenda
1. Objectives
2. Approach
3. Results
14

15. Unit DDP price analysis for Client China, total 6 items:
8 suppliers quote Client China items (5 from China, 1 from Turkey,2 from Vietnam).
15
Quotations lower than Client current price
• Turkey and Vietnam supplier quote FOB price, DDP price is calculated by DS.
Item no
Client current
CNY
1 2 3 4 5 6 7 8
China Turkey Vietnam
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8
41037686 131.07 - 76.57 - 215.00 229.60 166.17 122.86 235.46
41037687 135.06 - 78.66 - 219.00 - 173.06 126.67 244.52
41034618 38.05 - 41.36 - 68.60 121.90 87.63 80.49 85.00
43613888 90.00 93.00 79.67 86.50 86.46 - - 229.22 -
43612636 69.00 76.00 69.23 62.50 75.00 91.86 - 99.04 -
43613473 54.00 60.00 - 48.80 57.00 - - 87.53 -

16. Potential savings of 15% have been identified from Vietnamese supplier.
16
M CNY

17. Unit DDP price analysis for Client Italy, total 3 items:
6 suppliers quote Client Italy items (3 from China, 1 from Turkey, 2 from Vietnam).
17
Quotations lower than Client current price
• Turkey and Vietnam supplier quote FOB price, DDP price is calculated by DS.
Item no
Client current
EUR
1 2 3 4 5 6
China Turkey Vietnam
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6
41037686 17.06 10.94 27.93 28.60 20.66 15.34 29.24
41037687 17.57 11.20 28.45 - 21.51 15.81 30.35
41034618 4.97 5.04 7.36 15.22 10.92 10.06 10.62

18. Potential savings of 33% identified from Vietnamese supplier on Italian parts
18
M EUR

19. Total potential savings of €630k was identified
19
Total Potential Saving summary of Client China, Turkey and Italy
Supplier
Supplier
location
China Turkey Italy Total
% potential
saving
# items
quoted ( 16
RFQ items)
# items with
saving
Supplier 1 China 235,623 10,302 386,240 632,165 13.31% 15 11
Supplier 2 Vietnam 29,590 24,668 107,361 161,619 3.40% 16 4
Supplier 3 China 69,136 - - 69,136 1.46% 3 3
Supplier 4 China 13,094 - - 13,094 0.28% 16 1