Multi Category Sourcing in China, India, Vietnam and Turkey

Multi Category Sourcing in China, India, Vietnam and Turkey
Case Study Report
Dragon Sourcing
Your Tailored Sourcing Approach to Best Cost Countries
© 2015 Dragon Sourcing. All rights reserved. 1

© 2015 Dragon Sourcing. All rights reserved.
1. Objectives, Approach, and Timeline
2. Demand Analysis of 5 categories
3. RFI/RFQ approach
4. Results Summary
Agenda
2

3
Objectives
Objectives
The objective of this sourcing trial is to prove the approach and benefits of collaboration with Dragon Sourcing.
Scope
This scope is to conduct sourcing across 5 different categories across a number global markets to secure
competitive suppliers
Categories:
1. Barrier Fencing
2. Caulking Guns
3. Bulk Bags
4. Scaffolding
5. 150lb Screw Fittings

Approach – Phase 1
No. Step Deliverables
1.
Demand Analysis
Work with client to define and understand the products and requirements (specs, volumes, materials,
production technology requirements)
 Project Requirement
Questionnaire
 Kick-Off Report
2.
Supply Analysis
Identify long list of potential suppliers in the selected markets by leveraging B2B Websites, DS
Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References.
 Supplier Long List
3.
Telephone Pre-screening
Selection of suppliers 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)
 Shortlist for RFI/RFQ
4.
Develop RFI/RFQ
Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre-
qualify the competitiveness and capabilities of the suppliers, including: Background, financial, Client
and product experience, Quality certification & processes, Social Responsibility,
Manufacturing/technology capability, R&D capability
 RFI/RFQ Template
 Balanced Scorecard
 Introduction Letter
 NDA
Milestone 1: RFI/RFQ & Scorecard Approved
5.
Conduct RFI/RFQ Administration
The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant suppliers,
with telephone follow-up to push for maximum participation.
 Control Sheet
 Completed RFI/RFQs
6.
Analyze RFI/RFQ Responses
Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report which profiles
& objectively ranks the suppliers by capability and competitiveness, including a recommendation for
those to be audited.
 RFI/RFQ Report
 Supplier Profiles
 Proposed Shortlist for
Audit
Milestone 2: Shortlist for Audit Agreed
Phase 1: Supplier Pre-Qualification

Approach – Phase 2
No. Step Deliverables
7.
Prepare for Audits
Planning the audit schedule, budget, and drafting the Audit Questionnaire that will be used for the
supplier self-assessment and on-site audits.
• Audit Plan
• Audit Questionnaire
8.
Conduct Audits
Distribution of the Audit Questionnaire to suppliers for their self-assessment (and to get them
prepared), followed by onsite audits, with or without XXX buyers, of all the suppliers. Focus is
management, logistics, production & quality.
 Completed Audit
Questionnaires
9.
Analyse Audit Results
Analysis of the audit results, together with RFI/RFQ results, and preparation of a report that ranks the
suppliers, including a recommendation for those for sample development.
 Audit Report
 Supplier Audit Profiles
 Proposed Shortlist for
Sampling
Milestone 3: Shortlist for Sampling Agreed
10.
Sample Development & Testing
Managing the sample development and testing iterations to determine which suppliers can meet the
quality.
 Samples
 Sample Analysis Reports
11.
Negotiation & Contracting
Conducting final negotiations with the shortlisted suppliers, and facilitating contracting between
selected suppliers and XXX.
 Contract(s)
Milestone 4: Contracts Secured
Phase 2: Selection & Contracting

Schedule
Not started Done
In process Delay
Steps 6 - Oct. 13 - Oct. 20 - Oct. 27 - Oct. 3 - Nov. 10 - Nov. 17 - Nov. 24 - Nov.
1. Demand Analysis
2. Supplier Identification
3. Telephone pre-screening
4. Develop RFI/RFQ
5. Administer RFI/RFQ
6. Analyze RFI/RFQ Responses
1 RFI/RFQ Approved
2
Shortlist for Audit/Samples Agreed

3. RFI/RFQ approach
4. Results Summary
Agenda
7

Demand Analysis - Barrier Fencing
Product Specification
Product description Barrier Fencing, weather resistant
Colour: Orange
Size: 1m x 50m
Mesh dimensions 100mm x 40mm
Weight: 80GSM SQ/mtr
Material Durable plastic
Other requirement Coloured A4 paper label required.
Destination & Loading Information
Destination: UK
Number of pieces in a 20‘ GP container 2,000 rolls
Number of pieces in a 40‘ GP container 4,000 rolls
Number of pieces in a 40‘ HC container 4,300 rolls
Product Picture
Category: Barrier Fencing
Annual Quantity: 3000 rolls
8

Demand Analysis - Caulking Guns
Product description
400ml extra strong trade skeleton caulking gun
400ml professional revolving caulking gun
Material
Other requirement
Destination: UK
400ml extra strong
trade skeleton
400ml professional
revolving
Number of pieces in a 20‘ GP container 28,000 16,000
Number of pieces in a 40‘ GP container 56,000 32,000
Number of pieces in a 40‘ HC container 69,000 38,000
Product Picture
Category: Caulking Guns
400ml extra strong trade skeleton caulking gun
Annual Quantity: 15,000 pcs
400ml professional revolving caulking gun
9

Demand Analysis – Bulk Bags
Product description FLEXIBLE INTERMEDIATE BULK CONTAINERS
(FIBC)
Safety Factor (SF): 5:1
Safe Working Limit (SWL): 1000kg
Material: External Dimension: 75 x 85 x 95cm
Bottom closed
Material Woven Polypropylene, 140 gsm
Colour: Uncoated red
UV Treated
Other requirement Single trip FIBC’s for non hazardous goods
Certified to ISO 21898
Lifting loop detail:
Tunnel loops are 60 x 40cm.
Corner Loops are 3.8 x 30cm
Destination: UK
Number of pieces in a 20‘ GP container 7,500 Pcs
Number of pieces in a 40‘ GP container 15,000 Pcs
Number of pieces in a 40‘ HC container 17,000 Pcs
Product Picture
Category: Bulk Bags
These bags are designed and certified to be used for one filling only.
An FIBC of this category cannot be reused.
Printing: Buildbase branding in white font (identical to image)
Label: Label quoting test requirements and safe loading/lifting procedures
10

Demand Analysis - Quick Stage QS System Scaffolding
Product description Quick Stage QS System Scaffolding, 19 Items
Annual spend: approx. £75K
Material Q235
Other requirement
Surface treatment: HDG / Paint / Power coating
Destination: UK
Number of pieces in a 20‘ GP container 25 Tons
Number of pieces in a 40‘ GP container Not applicable as scaffolding is heavy cargo
Number of pieces in a 40‘ HC container Not applicable as scaffolding is heavy cargo
Product Picture
Category: Quick Stage QS System Scaffolding
11

Demand Analysis - 150lb Screw Fittings
Product description
150lb Screw Fittings
Annual spend £77K,
Annual quantity 30,800 pcs for 71 SKUs
Material 316 Stainless Steel
Other requirement
Destination: UK
Number of pieces in a 20‘ GP container 25 Tons
Number of pieces in a 40‘ GP container Not Applicable as screw fittings are heavy cargo
Number of pieces in a 40‘ HC container Not Applicable as screw fittings are heavy cargo
Product Picture
Category: 150lb Screw Fittings
(15 items, 71 SKUs)
12

3. RFI/RFQ approach
4. Results Summary
Agenda
13

120
43
17
5
46
9
3
22
8
4
2
13
12
3
2
0
30
60
90
120
150
180
210
No. of suppliers
identified and have
been called
No. of suppliers
passed phone
screening and
included in RFI/RFQ
process
No. of suppliers
responded to RFI/RFQ
No. of suppliers
recommended
China India Turkey Vietnam Malaysia
Progress Review – Barrier Fencing
In total, 204 suppliers has been identified and called; 74 suppliers have passed the phone screening and have been included in
RFI/RFQ process, 24 RFI/RFQ response have been received. 7 suppliers are recommended for factory audit and sampling.
Barrier Fencing – Progress Review
74
204
24
7
204 suppliers were identified initially.
130 suppliers were rejected during phone screening process the
following main reasons:
• Doesn’t produce the same barrier fencings (some are in other
material like PP, some are with different sizes, different color,
different weight, some are knitting, some are metal, some are chain
link…etc.)
• Traders, not a manufacturer.
• Doesn’t export, or can’t export by themselves.
74 suppliers were included in the RFI/RFQ process,
50 suppliers didn’t respond to RFI/RFQ for several main reasons:
• After checking the RFQ specifications, some supplier realized they
can not produce the exactly same product.
• Some suppliers are not able to respond to RFI to provide their
factory information as they’re not a real manufacturer or they didn’t
produce barrier fencing in their own factory.
• Some promised to respond on time but after a lot of pushing they
still didn’t respond.
• Some are not interested and doesn’t want to participate in our
selection process.
24 RFI/RFQ supplier responses were secured and after analysis of
competitiveness and capability we recommend 7 suppliers for next
steps: factory audit and sampling.

RFI/RFQ Process ‐ Rejection reason
No. of
suppliers
% China India Vietnam Malaysia Turkey
Declare unable to produce the same product
after checking the spec. and pictures in RFQ
(Some supplier only produce weaving
fencing…etc.)
27 55% 8 5 11 1 2
Not interested in participating the selection
process after reviewing the RFI/RFQ template
8 16% 8
Too busy to reply or can't respond on time 8 16% 6 1 1
Not manufacturing barrier fencing by their
own factory
5 10% 2 1 2
Not intend to produce Orange barrier fencing
in next year
1 2% 1
Only produce heavy barrier fencing with 550
GSM
1 2% 1
50 26 6 12 2 4
Barrier Fencing – Supplier Phone screening & RFI/RFQ process rejection reason analysis
Phone screening - Failed reason analysis RFI/RFQ process - Rejection reason analysis
Phone Screening ‐ Failed reason
No. of
suppliers
% China India Vietnam Malaysia Turkey
Don't produce required plastic barrier fencing, some are metal,
chain link fence, some are other type of fencing…etc.
48 37% 12 23 1 1 11
Don’t have export license, but they can export through a Trading
company.
18 14% 18
Traders only, not a manufacturer. 16 12% 4 10 2
Don’t produce barrier fencing in orange color, some only produce
green color.
15 12% 15
Can’t meet GSM requirement, some producing much heavier
fencing over 120GSM.
14 11% 14
Can’t meet mesh requirement 100xx x 40mm. 6 5% 6
Not reachable 6 5% 5 1
Not interested to participate in the project or selection process. 4 3% 3 1
Doesn’t export, only supply to domestic market. 3 2% 2 1
130 77 37 1 1 14
15

Barrier Fencing - DDP Price Calculation
FOB Price (supplier) Freight forwarding, customs & duties
DDP Price
+
Cargo Marine Insurance
FOB Price
Sea Freight
+
+
Import Duty
UK Local charges
+
Inland Truck
Transportation
cost
+ DDP Price=
+
1) Sea Freight: from different ports to Southampton (New freight rate received from forwarder on Nov. 6th, 2014)
2) UK local charges with Inland truck transportation cost: (New rate received from forwarder on Nov. 6th, 2014.)
Destination address: xxxx UK
3) Import duty rate: was searched in European commission Taric website
China: 6.5%, Vietnam: 0%, India: 0%, Turkey: 0%
16

Barrier Fencing - RFQ Summary
Category Pictures Annual Qty. No.
RFI
Score
Supplier name
Country of
Origin
FOB Port
FOB price
In US$
CIF price In US$ DDP Price In US$ Annual
Spend20' GP 40' GP 40' HC 20' GP 40' GP 40' HC
Barrier
Fencing
3,000 rolls
1 84 Supplier 1 China Ningbo $8.066 $8.657 $8.657 $8.641 $9.919 $9.569 $9.528 $28,708
4 79 Supplier 4 China Tianjin $9.100 $9.694 $9.694 $9.678 $11.025 $10.675 $10.633 $32,024
6 Supplier 6 China Tianjin $10.500 $11.099 $11.099 $11.083 $12.520 $12.170 $12.129 $36,511
7 83 Supplier 7 China Qingdao $10.600 $11.199 $11.199 $11.183 $12.627 $12.277 $12.236 $36,832
9 49 Supplier 9 Turkey Istanbul $12.000 $12.611 $12.363 $12.341 $13.311 $12.713 $12.666 $38,139
10 84 Supplier 10 Turkey Izmir $12.500 $13.113 $12.865 $12.842 $13.813 $13.215 $13.168 $39,644
12 57 Supplier 12 China Guangzhou $12.400 $13.005 $13.005 $12.989 $14.551 $14.201 $14.159 $42,602
13 Supplier 13 India N/A $13.990 $14.591 $14.389 $14.364 $15.291 $14.739 $14.690 $44,216
15 67 Supplier 15 India Mumbai $14.500 $15.103 $14.901 $14.876 $15.803 $15.251 $15.201 $45,752
16 Supplier 16 China Shanghai $13.400 $14.009 $14.009 $13.993 $15.619 $15.269 $15.228 $45,807
20 55 Supplier 20 Turkey Istanbul $16.000 $16.625 $16.376 $16.354 $17.325 $16.726 $16.679 $50,179
22 Supplier 22 China Ningbo $16.000 $16.617 $16.617 $16.601 $18.397 $18.047 $18.006 $54,142
23 48 Supplier 23 India Mumbai $18.800 $19.417 $19.215 $19.190 $20.117 $19.565 $19.516 $58,694
24 33 Supplier 24 Turkey Izmir $21.500 $22.143 $21.895 $21.872 $22.843 $22.245 $22.198 $66,734
17
NOTE: Suppliers marked in blue color are the recommended suppliers to proceed with next steps (audits/sampling).

Barrier Fencing - Price Comparison Chart
P.S. Supplier 9 was recommended but with low score is because they are considered strong however they’re not willing to disclose some of their company information at early stage.
Once they are shortlisted, they’re willing to provide more of their company information.
Barrier Fencing - Unit price comparison
$8.07 $8.20 $8.31
$9.10 $9.44
$10.50 $10.60 $10.70
$11.85
$12.40
$13.00
$13.40 $13.50 $13.50
$13.90
$15.00
$16.00
$13.99
$14.50
$18.80
$12.00
$12.50
$16.00
$21.50
$9.53 $9.67 $9.79
$10.63 $11.00
$12.13 $12.24 $12.34
$13.57
$14.16
$14.80
$15.23 $15.33 $15.33
$15.76
$16.94
$18.01
$14.69
$15.20
$19.52
$12.67
$13.17
$16.68
$22.20
84 86 80 79 81
0
83 70 87
57
0 0 0
51
0 0 0 0
67
48 49
84
55
33
‐500
‐400
‐300
‐200
‐100
0
100
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
Supplier 8
Supplier 11
Supplier 12
Supplier 14
Supplier 16
Supplier 17
Supplier 18
Supplier 19
Supplier 21
Supplier 22
Supplier 13
Supplier 15
Supplier 23
Supplier 9
Supplier 10
Supplier 20
Supplier 24
China India Turkey
Sum of Price ‐ FOB Sum of Price ‐ DDP Average of RFI Score ‐ FOBFOB Price DDP Price RFI Score
Unit price / Roll RFI Score
Recommended suppliers
18

36 32 32
39
29 28 29 34
25 24 20
13
30
22 19 15
30
29 25
23
24 25 24 14
13 11 21
13
30
15
9
8
12
16
17 14
18 17 16
14
13
11
17
12
17
11
13
5
9 10 10 8
10 10 10
8
6
5
10
10
7
7
8
5
0
10
20
30
40
50
60
70
80
90
100
Supplier 11 Supplier 2 Supplier 1 Supplier 7 Supplier 5 Supplier 3 Supplier 4 Supplier 8 Supplier 12 Supplier 18 Supplier 15 Supplier 13 Supplier 10 Supplier 20 Supplier 9 Supplier 24
87 86 84 83 81 80 79 70 57 51 67 48 84 55 49 33
China India Turkey
Company Background Production Capability Quality Control Management & Certifications Cooperation Willingness
RFI Score
1919
Barrier Fencing - Supplier RFI scorecard summary
24 RFQ responses were secured, however only 16 suppliers completed the RFI section.
RFI Score summary – Barrier Fencing
Recommended suppliers
P.S. Supplier 9 was recommended but with low score is because they’re not willing to disclose some of their company information
at early stage, once they are shortlisted, they’re willing to provide more of their company information.

Barrier Fencing - Supplier Recommendation
No. Country Supplier name
RFI
Score
Sample
available
Sample
cost
Sample
Lead time
Recommend
for factory
Audit
Reason for recommending
1 China Supplier 2 86 Y Free 10 days Y
• Competitive price.
• Rich experience in the industry, have produced the same barrier fencing before.
• 30% export to Europe with 11 years of export experience, especial good experience export to UK.
• Good production capacity 3,650 Tons per year.
• 70% export to Europe with 7 years of export experience.
• Production capacity 2,000 Tons per year.
3 China Supplier 5 81 N US$ 250 15 days Y
• Good experience, have produced the same barrier fencing before, but didn’t keep samples, so they
will charge for sample cost.
• Good experience in the industry, have produced the same barrier fencing before.
6 Turkey Supplier 10 84 Y Free Immediately Y
• Very promising company with wide product range.
• They produce barrier fencing and also bulk bags, paper bag, plastic cutlery.
7 Turkey Supplier 9 49 Y Free Immediately Y
• Supplier 9 is the only big manufacturer who only does this business in Turkey.
• Very professional firm, easy to communicate in English.
20

Company name: supplier 2
Company Background
RFI/RFQ rank 2
Score: 86
Country: China
COMPANY BACKGROUND
Year Founded 2003
Ownership
(State Owned/ Private/ Foreign Investment)
Private
Business Type: Manufacturer, or trader ? Manufacturer
Registered Capital (in US$) 1M
Export License ? (Y/N) Yes
Be able to export to UK / Europe? (Y/N) 11
Export Experience (Years) Yes
Work Floor Size ( Square meters) 3,000
Total Employee Number 50
No. of English speaker and writer 5
CORPORATE SOCIAL RESPONSIBILITY
Declare to adhere to all rules and regulations in respect to child labor? (Y/N) Yes
Working hours specified in the employment contract? (Y/N) Yes
Declare to adhere to all rules and regulations in respect to environmental issues? (Y/N) Yes
Declare to adhere to all rules and regulations in respect to health and safety issues?
(Y/N)
Yes
HUMAN RESOURCES
Factory Workers
Quality Control
staff
Technical Staff /
R&D Engineer
Sales &
Management
Others
Employee No. 18 6 5 15 3
COMPANY INFORMATION
Company Name
Factory Address
City
Province
Country
Company Website
CONTACT PERSON INFORMATION
Contact Person
Title
Email Address
Telephone Number
Mobile Number
ANNUAL TURNOVER
2014 Forecast 2013 2012
Total sales turnover (in M USD) 4.5M 3.5M 2.5M
MAIN MARKET
Europe (%) US (%) Asia (%) Domestic (%)
Rest of the world
(%)
% of Sales 30% 30% 20% 0% 0%
TOP 3 CUSTOMER
Customer Name Industry Country % of Sales Type of Product
Top 3
Customers
Midwest Air N/A US 30% N/A
Signet N/A Australia 10% N/A
TIENHUI N/A South Africa 10% N/A
Commercial terms
Payment terms
30% deposit in advance and the balance to be paid against the fax copy of the
shipping documents.

Company name: Supplier 2
Production Capability & Quality Control Management
RFI/RFQ rank 2
Score: 86
Country: China
PRODUCTION CAPABILITY
Main Products plastic grids and geosynthetics
Main materials Plastics
Number of production lines 6
Maximum Production Capacity (Tons/ year) 2,000
Actual Production Capacity of 2013 (Tons / year) 1,800
No. of Shifts Per Day 2
Working Hours Per Shift 8 hours
International Standards Applied Ali certification
Standard lead time after first order 20days
Lead time for repeat orders 15days
PRODUCTION EQUIPMENT
Equipment name Quantity Brand / Type Usage of the Equipment
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
INVENTORY MANAGEMENT
Formal Documented Inventory Management
System in place? (Y/N)
Yes
Use ERP (Enterprise resource planning)? (Y/N) No
Follow the FIFO management with the stock? (Y/N) Yes
CERTIFICATIONS
Certificate Y/N
Date of
Certificate
Date of
Expire
Certificate
number.
Certifying
Organization
ISO 9001:2008
Quality management systems
Yes Yes N/A N/A N/A N/A
ISO 14001
Environmental management
systems
No N/A N/A N/A N/A N/A
Other current
certificates:
(Please specify)
Ali certification Yes Yes N/A N/A N/A Alibaba
N/A N/A N/A N/A N/A N/A N/A
QUALITY CONTROL MANAGEMENT
General Production Defective Rate (% rejected)? 0.01%
Time to keep QC records? (in Month) 3
Accept 3rd party QC? (Y/N) Yes
Customer Satisfaction Survey in place? (Y/N) Yes
Rules for maximum reaction time to deal with quality claim from client?
(Hours)
24
Inspection?
（Y/N）
Inspection
report
available?
(Y/N)
Frequency
or
testing %
QC Criteria Testing Method
Testing
Equipment
Incoming Raw
material quality
control
In-process /
On-line quality
control
Finished product
quality control

Company name: Supplier 2
Factory Photos
Country: China
FACTORY PHOTOS
Factory Overview Office R&D room
Workshop Workshop Warehouse
Machinery Machinery Lab / test center
RFI/RFQ rank 2
Score: 86

2. Demand Analysis of 5 Categories
3. RFI/RFQ approach
4. Results Summary
Agenda
24

Across all 5 categories,
DS have identified 639 China suppliers, 278 India suppliers，149 Turkey suppliers and 53 Vietnam and Malaysia suppliers;
resulting in 128 RFI/RFQ received, 29 suppliers recommended for audit and sampling.
25© 2015 Dragon Sourcing. All rights reserved.
China sourcing India sourcing
Vietnam & Malaysia
sourcing
Turkey sourcing 5 Countries In Total
# Category
Supplier Identified
Tel Pre‐screen called
# of supplier passed phone screening
RFI / RFQ received
Supplier recommended
Supplier Identified
RFI / RFQ received
Supplier Identified
RFI / RFQ received
Supplier Identified
RFI / RFQ received
Supplier Identified
RFI / RFQ received
1 Barrier Fencing 120 120 43 17 5 46 46 9 3 0 16 16 14 0 0 22 22 8 4 2 204 204 74 24 7
2 Caulking Guns 107 107 22 21 4 47 47 6 1 0 0 0 0 0 0 14 14 5 2 0 168 168 33 24 4
3 Bulk Bags 111 111 64 17 0 56 56 34 12 6 16 16 5 5 0 42 42 26 4 0 225 225 129 38 6
4 Scaffolding 128 128 34 14 5 61 61 33 5 1 9 9 0 0 0 26 26 16 2 0 224 224 83 21 6
5 Screw Fittings 173 173 45 13 5 68 68 31 6 0 12 12 1 0 0 45 45 7 2 1 298 298 84 21 6
5 Categories In Total 639 639 208 82 19 278 278 113 27 7 53 53 20 5 0 149 149 62 14 3 1119 1119 403 128 29

Multi Category Sourcing in China, India, Vietnam and Turkey

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