Overview on Textile Sourcing in Vietnam, Thailand, China, Costa Rica, Guatemala and Honduras!

Textiles Sourcing
Case Study
Dragon Sourcing - 龙源
Delivering sustainable sourcing value from emerging markets

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

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Context
Background:
• Client is a professional eDistributor of sports products in the US.
Project objectives:
• To carry out sourcing services for textiles to achieve cost savings and identify new qualified suppliers.
Geographical scope:
• Vietnam, Thailand, China, Costa Rica, Guatemala and Honduras
Deliverables:
• RFI / RFQ Template
• RFI / RFQ report
• Balanced Scorecard
• Supplier profiles
• Recommended audit supplier list

Vest Band Sleeve Jersey Sock Shorts Glove
Sourcing products

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Agenda
1. Sourcing Project Introduction
3. Conclusions

1. Demand Analysis
Approximate yearly volumes was collected from the client at the beginning of the project.
6
No. Product Type
2015
Sales
Qty.
(pcs)
2016
Sales
Qty.
(pcs)
2017 Sales
Qty.
(pcs)
Target Price
(US$/pc)
Estimated
2017 total
spend
(US$)
% in total
spend
1
Vest
(including 55
SKUs)
251,678 259,762 230,151 19.19 ~ 57.15 193750 69%
2
Band
(including 22
SKUs)
97,882 92,123 86,960 0.28 ~ 0.66 33007 12%
3
Sleeve
(including 6
SKUs)
46,942 53,243 44,435 0.57 ~ 1.17 27940 10%
4
Jersey
(including 21
SKUs)
13,025 10,791 4,050 4.39 ~ 5.27 19559 7%
5
Sock
(Including 4
SKUs)
3,281 2,890 1,392 2.31 ~ 3.14 3475 1.2%
6
Shorts
(Including 5
SKUs)
3,858 3,181 1,002 2.68 2686 1.0%
7
Glove
(Including 4
SKUs)
3,406 1,966 1,947 0.70 ~ 0.84 1458 0.5%
Total 281,874 100%
Vest,69%
Band , 12%
Sleeve, 10%
Jersey, 7%
Sock, 1.2%
Shorts, 1.0%
Glove, 0.5%
Other, 2.7%
Other Requirements:
• 2 Client current suppliers should not be contacted :
 XXX Co., LTD
 XXX Co., LTD

Not started Done
In process Delay
Note that the schedule maybe impacted by the time taken to collect category specifications, gain deliverable
validation, short list suppliers, produce samples & test samples.
2. Approach & Schedule
RFI-RFQ process was completed in 11 weeks
September
November December January
W 1
Nov.3rd
W 2
Nov.10th
W 3
Nov.17th
W 4
Nov.24th
W 5
Dec.1st
W 6
Dec.8th
W 7
Dec.15th
W 8
Dec.22th
W 9
Dec.29th
W 10
Jan.5th
W 11
Jan.12th
Auditing
(within W12 -W13)
1. Demand Analysis
2. Supply Market Analysis
3. Telephone Pre-screening
4. Develop RFI/RFQ
5. Conduct RFI/RFQ
Administration & Supplier
Scorecard
6. Develop the Score card
Analysis RFI /RFQ
Responses
7. Suppliers Auditing
(Optional)
Today
10
RFI/RFQ Approved
Shortlist for Audit
Agreed
2
1

3. Weekly report
Weekly progress reports are sent to client every week
8
52 52
23
42
11
5
130
130
48
46
46
15
97
47
14
46
0
60
120
180
240
300
360
420
480
Suppliers Identified Telephone Pre-Screening
Completed
Passed Telephone Pre-
Screening
RFI/RFQ received Supplier Short-listed
Textiles sourcing weekly report
-week 4
Honduras
Guatemala
Costa Rica
China
Thailand
Vietnam
413
286
105

9
4.Suppliers Long list building in each target Country
An extensive supplier data base is built leveraging multiple sources of information

5.Telephone Pre-screening
Pre-screening process was administered to filter the potential suppliers for further next
steps
10
No. Telephone Pre-screening Criteria
Textiles
Criteria answer
1 Are you manufacturer or trader? Must “manufacturer”
2 Do you have an export license? Must Yes
3 Does your facility have the ability to sublimate logos and/or imagery onto fabrics? Must Yes
4 Is your facility a versatile sewing shop capable of producing a broad range of textile products? Must have
5 Can your facility offer a range of packaging options? Must Yes

6.Textiles-Supply Market Analysis
Supplier rejection analysis were shared to client for each step: pre-screening and RFI-
RFQ administration.
11
44
11
9
8
4 3 2
Manufactuer but not producing as per the technical requirement
Unable to contact them/ Company shutdown
Traders/distributors or Importers only,
Cannot export
Not Interested
Duplicate suppliers
Stopped Producing
10
9
8
7
6
Cannot produce liquid filled transformers
Not interested to continue
Do not wish to fill the RFI template
Cannot produce within the given output voltage range.
Need drawings/technical specs to review first
Example for RFI rejection analysis
Example for Pre-screening rejection analysis

7.Send RFI/RFQ through GSP to client for Review 1/2
RFI process was administered to filter out most capable suppliers
12

7.Administer RFI/RFQ Through GSP 2/2
After Client approved the RFI/RFQ, it was sent to suppliers through GSP
13

14
8.RFI process was administered to filter out most capable suppliers 1/2

15
Supplier Profile example
8.RFI process was administered to filter out most capable suppliers 2/2

9.Draft score and send it to client for review 1/3
The RFI-RFQ responses are analyzed using a score card validated by the client
16

9.Score card 2/3
17
Business information Weight of criteria Scoring Max Score per criteria Weight of the section
Year Founded 5% 1=After 2011,2=Between 2000 to 2010,3=Before 2000 3
20%
Number of Employees 5% 1 = below 20,2 = 21 - 50,3 = 50 - 100,4 = 100+ 4
Years of export experience 5% 1 = below 3 years,2 = 3 - 10 years,3 = 10+ years 3
Company type 5% 0=Trader/Distributor/Others ,1= Manufacture 1
what incoterms can your company quoted and operate? 5% 1= only FOB,2=Can offer FOB & CIF,3= Can offer all: FOB, CIF, DAP & DDP 3
Sales revenue in 2016 in US$ 5% 1=Less than 1 M US$,2= 1 - 3M US$ ,3= 3 - 5 M US$ ,4=above 5 M US$ 4
Square meters(m²) of the work floor 5% 1 = below 20,00 (m²),2 = 20,01- 5,000 (m²)3 = 50,00-10000 (m²),4=10000(m²)+ 4
Ownership 5% 0 = Others,1 = State owned,2 = Foreign investments/ Joint Venture/Public limited,3 = Private 3
Sales distribution 5%
1= 70% or more to domestic market,2= 50% or more sales to export market
3= 70% or more export to EU+ North America
3
Industry mainly serve 10% 0= No info or others,1=Same as client 1
Customer reference 15% 0=Not provided ,1=Local /domestic customers,2= International customers3= clients from client industry 3
Export license 15% 0=No,1=Yes 1
Do you have experience in producing soccer items(Jerseys,shorts.socks,captain
arm bands, comp sleeve, scrimmage vest? If yes, how many years ?
15% 0=No,1=Yes 1
Production Weight of criteria Scoring Max Score per criteria Weight of the section
Does your company have equipment maintenance program in place? 5% 0= No,1= Yes 1
30%
Does your company have production and safety training for each worker?
5% 0= No,1= Yes 1
Does your company have have production operating instruction on site? 5% 0= No,1= Yes 1
Does your company have have production/service traceability system? 5% 0= No,1= Yes 1
Does your company have have a formal/documented inventory management
system ?
5% 0= No,1= Yes 1
Does your company use ERP system? 5% 0= No,1= Yes 1
How many pieces of textiles does your company produce per year? 10% 1=<=300000,2=<=500000,3=>=500000 3
Is your facility a versatile sewing shop capable of producing broad range of textile
products?
15% 0=No,1=Yes 1
Does your facility have the ability to sublimated logos and /or imagery onto fabrics? 15% 0=No,1=Yes 1
Percentage of your turn from soccer textiles ?% 15% 1=<= 10%,1= <=20%,3>=20% 3
Can your facility offer a range of packaging options ? 15% 0=No,1=Yes 1
Quality management Weight of criteria Scoring Max Score per criteria Weight of the section
what performance does your company achieve on average in out going quality
measure(%rejected ?
15% 0=5%-10%,1=3%-3%,2=1%-2%,3<=1% 3
30%
Does your company have incoming material inspection and report? 15% 0= No,1= Yes 1
Does your company have a documented company-wide quality manual? 15% 0= No,1= Yes 1
Does your company have clear and systematic procedure to collect,register,handle
and solve customer complaints?
15% 0= No,1= Yes 1
Does your company have daily on line quality inspection and report? 20% 0= No,1= Yes 1
Does your company have final products inspection and report? 20% 0= No,1= Yes 1

18
Social Responsibility
Weight of
criteria
Scoring Max Score per criteria Weight of the section
Do you adhere to all rules and regulations in respect to child labor? 25%
0= No
1= Yes
1
10%
Are the working hours specified in the employment contract? Do you
comply with the regulations in regard to working hours?
25%
0= No
1= Yes
1
Do you adhere to all rules and regulations in respect to environmental
issues?
25%
0= No
1= Yes
1
Do you adhere to all rules and regulations in respect to health and
safety issues?
25%
0= No
1= Yes
1
Subtotal 100% 10%
Certificate, documents and pictures
Weight of
criteria
Scoring Max Score per criteria Weight of the section
Please upload your company's business registration certificate 5% 0=not provided ,1=uploaded and clear to read 1
10%
Please upload your company's SA 8000 certificate 10% 0=not provided ,1=uploaded and clear to read 1
Please upload your company's SIO 14001 certificate 10% 0=not provided, 1=uploaded and clear to read 1
Please upload your company's SA 8000 certificate 10%
0=not provided
1=uploaded and clear to read
1
Please upload your company's Sates 16949 certificate 10%
0=not provided
1
Please upload your company's presentation 15%
0=not provided
1
Please upload your company's pictures of
entrance,workshop,machine,test lab, warehouse and office
20%
0=not provided
1
Please upload your company's ISO 9001 certificate 20%
0=not provided
1
9.Score card 3/3

10.Textiles-RFI score and ranking
27 suppliers responded to the RFI-RFQ
19
0.00%
10.00%
20.00%
30.00%
0
20
40
60
80
100
Textiles-Supplier Score and ranking
Certificate,documents and pictuers Social Responsibility
Quality system Production
Business information %Cost saving

China:18 RFI/RFQ received
Vietnam:1 RFI/RFQ received
Thailand:2 RFI/RFQ received
Guatemala :4 RFI/RFQ received
Honduras :No RFI/RFQ received
Costa Rica :2 RFI/RFQ received
Supplier map
11.RFQ analysis 1/4
Supplier Geographic Distribution: 27 RFQ received in 5 countries

12.RFQ analysis 2/4
27 RFQ received in total, 3 suppliers quoted all items
21
Product
No.
of
SKU
No. of SKU quotes per supplier
China
Vietn
am
Thailand Guatemala Costa Rica
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Suppl
ier X
Player Gloves 4 4 4 4 4 4 4
Referee Shorts 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
Referee sock 3
stripes
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Referee sock 2
stripes
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Referee Jersey 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21 21
DLX Scrimmage
Vests
39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39 39
DLX Numbered
Vests
8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
Numbered Vests 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
Black Arm Band 1 1 1 1 1 1 1 1 1 1 1
International
Captain Arm Band
3 3 3 3 3 3 3 3 3 3 3 3
Reflective Captain
Arm
2 2 2 2 2 2 2 2 2 2 2 2 2
Captain C Band 4 4 4 4 4 4 4 4 4 4 4 4 4
Captain Arm Band 12 12 12 12 12 12 12 12 12 12 12 12 12
Compression
sleeve
6 6 6 6 6 6 6
Total SKU 117 117 81 83 81 22 4 76 85 81 61 25 113 30 113 111 85 117 22 97 44 60 117 81 107 43 85
Supplier Quotations lower than client target price
Supplier Quoted all item

22
Client total spend USD 281,874
# Supplier
Sub-category cost
saving
Cost
Saving/U
SD
%Cost
Saving
Total
cost
saving
%Total
cost
saving
RFI score
Score
ranking
Short
listed
Short listed reason Remark
USD
1 Supplier x
REFEREE SHORTS 1,183 44%
46,393 16.45% 67 21 Yes
Have the biggest cost
saving,5 items have cost
saving
Vietnam
REF SOCK 3 STRIPE 1,832 74%
REF SOCK 2 STRIPE 807 81%
REF JERSEY 6,599 34%
DLX SCRIM VEST 35972 21%
2 Supplier x
30,351 10.77% 84 5 Yes
5 items have cost saving,
Vest have bigger cost saving
China
DLX SCRIM VEST 24,498 14%
DLX Num Vest 2,492 23%
Num Vest 2,670 28%
3 Supplier x
REF SOCK 3 STRIPE 1,136 46%
13,000 4.61% 92 1 Yes
The biggest cost saving, The
highest RFI score,REF
JERSEY have the biggest
cost saving
China
4 Supplier x
9,461 3.35% 73 13 Yes China
International arm band 1,315 47%
Reflective Arm Band 459 75%
Captain C Band 3,062 37%
Captain arm 3,891 21%
5 Supplier x
REFEREE SHORTS 181 7%
11787 3.27% 27 24 China
6 Supplier x REF JERSEY 8,543 44% 8543 3.03% 72 16 Yes China
7 Supplier x
Black arm band 115 5%
5211 1.85% 79 10 Yes
4 items have cost saving, arm
band have bigger cost saving
China
International arm band 978 35%
12.RFQ analysis-3/4
Based on cost savings and RFI score, 5 suppliers were shortlisted for auditing and sampling, (4
in China,1 in Vietnam)
Short list supplier

23
Client total spend USD 281,874
# Supplier
Sub-category cost
saving
Cost
Saving/U
SD
%Cost
Saving
Total cost
saving
%Total
cost
saving
RFI score
Score
ranking
Short listed
Short listed
reason
Remark
USD
8 Supplier x
6378 1.78% 76 12 Yes China
REF JERSEY 1,334 7%
9 Supplier x
3,573 1.27%
68 19
China
International arm band 851 30% Yes
10 Supplier x
2,998 1.11%
Good RFI score,Quoted
all Item,5 items have cost
saving,Compression
Sleeve have the biggest
cost saving
China
International arm band 683 24% Yes
Reflective Arm Band 52 5% 84 3
Captain C Band 787 9%
Compression Sleeve 1,279 5%
11 Supplier x REF JERSEY 2,144 11% 2,144 0.76% 63 22 China
12 Supplier x
627 0.22%
No RFI
China
13 Supplier x Player Gloves 601 41% 601 0.21% 84 4 Yes China
14 Supplier x
552 0.20%
80 8
Guatemala
15 Supplier x
413 0.15%
78 11
China
16 Supplier x REF SOCK 2 STRIPE 40 4% 40 0.01% 71 17 China
12. RFQ analysis-4/4
Based on cost savings and RFI score, 5 suppliers were shortlisted for auditing and sampling,
(4 in China,1 in Vietnam)
Short list supplier

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Agenda
1. Introduction
3. Conclusions

25
 Whole project was carried out 11 weeks in Vietnam,Thailand,Costa Rica,Guatemala,Honduras and China
1) In total 413 suppliers were identified,141 suppliers passed phone screening, 27 RFI/RFQ received (Vietnam 1, Thailand 2 ,China 18,
Guatemala 4, Costa Rica 2)
2) Textiles have 14 sub-categories :Player Gloves, Referee Short, Referee Sock 3 Stripes, Referee Sock 2 Stripes, Referee Jersey, Dlx
Scrim Vest, Dlx Num Vest, Num Vest, Arm Band Blk, Intl Captain Band, Reflective Arm Band, Captain C Band, Captain Arm Band,
Comp Sleeve,In total 117 SKUs
3) Only 3 suppliers quoted all SKUs, most of the suppliers tend to specialize in specific sub-categories
 Savings reached 17% and 5 suppliers were shortlisted for sampling and auditing (4 in China, 1 in Vietnam)
 The next steps Include:
a. On-site audit to verify their production capability, quality and management
b. Sample making to ensure supplier meet client requirements
c. Place trial production orders to verify suppliers’ capabilities regarding production quantities
Conclusions

Overview on Textile Sourcing in Vietnam, Thailand, China, Costa Rica, Guatemala and Honduras!

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