Download as PDF, PPTX
Uploaded byJohn William
Steel Shelving Rack Case Study by Dragon Sourcing
The document outlines a sourcing project for a USA-based manufacturer of storage products, focusing on steel shelving racks, with the goal of identifying potential suppliers from ten countries. The sourcing process comprised a two-stage approach including supplier pre-qualification and contracting, with key deliverables such as a supplier database, analysis report, and supplier profiles. The project successfully identified 234 suppliers and received 20 responses to the RFI/RFQ within an 8-week timeline, resulting in recommendations of certified suppliers capable of in-house production.
More Related Content
Similar to Steel Shelving Rack Case Study by Dragon Sourcing
Steel Shelving Rack Case Study by Dragon Sourcing
- 1. Dragon Sourcing -龙 源 Delivering sustainable sourcing value from emerging markets Steel Shelving Rack Case Study
- 2. 222222222 Agenda 1. Sourcing ProjectIntroduction 2. Sourcing Approach 3. Conclusions
- 3. - Client Introduction& Project Objectives, Client Introduction: USA based client in the business of business of manufacturing, assembling, designing and marketing cabinets, shelving, files, lockers, toolboxes and plastic storage. Project Objectives: To identify and qualify potential suppliers by potential suppliers by running Request for Information/Request for Quote (RFI-RFQ) process through procurement and sourcing direct from manufacturers in 10 countries. Category • Steel Shelving Rack (Complete unit) • Component – Beams and Post for steel shelving racks Geographical scope: Covering10 Countries. • Eastern Europe: Hungary, Poland, Slovakia, Czech Rep, Bulgaria, Slovenia, Romania, Serbia and Croatia. • Asia: India. Supplier key requirement: Supplier should have all the production the production process in house mainly the powder coating facility. Quality management certification will be considered as advantage. 3 Dragon Sourcing approach in 2 stages Stage 1: Supplier Pre-Qualification 1. Demand Analysis 2. Supply Market Analysis 3. Develop RFI/RFQ 4. Administer RFI/RFQ 5. Analyse RFI/RFQ Responses Deliverables: Stage 1 - Supplier database - RFI-RFQ template & analysis report - Supplier profiles including factory and product pictures, suppliers location, price analysis, supplier recommendation. Stage 2: Audits, Selection & Contracting to be finalised post stage 1 completion. - Audit Report - Samples - Contract(s)
- 4. 4 # Complete unitNumber of SKU’s in category Description 1 Complete unit- Product 1 • Heavy Duty 5-Shelf steel unit • Wooden shelves • 72' Height, 36' width, 18' depth 2 Complete unit – Product 2 • Heavy Duty 5-Shelf steel unit • Wooden shelves • 78' Height, 48' width, 24' depth # Components Number of SKU’s in category Description 1 • Z BEAM Part # 1 • 18 inch brace 2 Part # 2 • 24 inch brace 3 Part # 3 • 36 inch beam 4 Part # 4 • 48 inch beam 5 Part # 5 • 60 inch beam 6 • POST Part # 6 • 30inch post 7 Part # 7 • 36 inch post 8 Part # 8 • 39 inch post - 2 styles from complete unit and 8 components were selected for RFQ, - And suppliers were asked to offer their existing boltless designs.
- 5. 555555555 Agenda 1. Sourcing ProjectIntroduction 2. Sourcing Approach 3. Conclusions
- 6. - Following stepswere covered under stage 1: Supplier Pre-Qualification No. Step Deliverables 1. Demand Analysis Work with client to define and understand the Products and requirements (specs, volumes, current unit prices, delivery destinations of delivery/consumption). Collect samples of the products in order to ensure potential suppliers fully understand them • Kick-Off Report 2. Supply Market Analysis Identify long list of potential manufacturers in countries in scope by leveraging B2B websites, DS database, fair catalogues, Chamber of Commerce, magazines, network, references. • Supplier Long List 3. Telephone Pre-screening Selection of manufacturers to be included in the RFI/RFP process by telephone pre-screening based on agreed simple criteria (e.g. capability to make the product, can export, quality certifications, interest in participating, etc. • Shortlist for RFI-RFQ process 4. Develop RFI/RFQ document Prepare an RFI/RFQ document, with an aligned balanced scorecard that has the objective to pre-qualify the competitiveness and capabilities of the manufacturers, including: background, financial, client and product experience, quality certification & processes, social responsibility, manufacturing/technology capability, R&D capability. • RFI-RFQ Template • Balanced Scorecard 5. Administer RFI/RFQ: The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant manufacturers, with telephone follow-up to push for maximum participation. • Completed RFI-RFQ’s 6. Analyze RFI/RFQ Responses: Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report, which profiles & objectively ranks the manufacturers by capability and competitiveness, including a recommendation for those to be audited. • RFI-RFQ Report • Supplier Profiles • Proposed Shortlist for sampling and/or audit. 6
- 7. Complete Unit –Steel Shelving Rack, Yearly volumes and estimated yearly spend value was over US$ 30 million collected at the project kick off stage. 7 # Category Number of SKU’s in category Description Estimated Yearly Volumes Estimated yearly spend in US$ FOB Target Price in US$ 1 Steel Shelving Rack Product 1 • 5 Shelf steel unit, wire shelves • 78' Height, 48' width, 24' depth units XX XX XX 2 Product 2 • 5 Shelf steel unit, wire shelves • 78' Height, 60' width, 24' depth units XX XX XX 3 Product 3 • Heavy Duty 5-Shelf steel unit • Wooden shelves • 72' Height, 36' width, 18' depth units 500,000 XX XX 4 Product 4 • Heavy Duty 5-Shelf steel unit • Wooden shelves • 78' Height, 48' width, 24' depth units 250,000 XX XX 5 Product 5 • Bulk Steel 4 Storage Rack, • Adjustable wooden shelves • 60' Height, 36' width, 18' depth units XX XX XX RFQ selected styles
- 8. Yearly volume are30 million units of components, Estimated yearly spend value was over US$ 15 million collected at the project kick off stage. 8 # Components Number of SKU’s in category Description Estimated Yearly Volumes in million Estimated yearly spend in US$ M FOB Target Price in US$ per unit 1 Z BEAM Part # 1 • 18 inch brace units XX XX XX 2 Part # 2 • 24 inch brace units XX XX XX 3 Part # 3 • 36 inch beam units XX XX XX 4 Part # 4 • 48 inch beam units XX XX XX 5 Part # 5 • 60 inch beam units XX XX XX 6 POST Part # 6 • 30inch post units XX XX XX 7 Part # 7 • 36 inch post units XX XX XX 8 Part # 8 • 39 inch post units XX XX XX
- 9. • Project timelinewas same in all the 10 target Countries. • Weekly progress report was sent every Friday. Steps Duration/week commencing Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 10 - 14 Sep 17 - 21 Sep 24 - 28 Sep 1- 5 Oct 8 - 12 Oct 15 - 19 Oct 22 - 26 Oct 29 Oct - 2 Nov 5- 9 Nov 1. Demand Analysis 1 2. Supply Market Analysis (Long list supplier database) 2 3. Pre-screening the identified suppliers 2 4. Develop RFI/RFQ template and validate from customer. 1 5. Administer RFI/RFQ process 3 6. Analyze responses & submit RFQ report 2 1 2 9 Not started Done In process Delay Project Schedule, - Stage 1: Supplier Pre-Qualification timeframe. - Project was completed within 8 weeks as per schedule. Timelinereducedto8weeks
- 10. 10 • Full sourcingprocess including building long list of supplier databasewas done online on the DS e-sourcing tool GSP - An extensive supplier data base as per target country wise was built by leveraging multiple sources of information & from existing DS database. Confidential
- 11. 11 • Full sourcingprocess including pre-screening the suppliers was done online on the DS e-sourcing tool GSP - Pre-screening process was initiated after receiving client validation, - This process was to filter the long list of suppliers prior moving them to the RFI-RFQ step
- 12. 12 Supplier rejection analysiswas shared with client for each step, 60 31 26 26 11 12 3 1 1 1 2 Key production process not in-house Cannot Export Traders or Importers only, Unable to contact/Stopped Producing/ Company shutdown Do not have In house powder coating facility Not interested Cannot meet the technical requirement / quality standard Told to contact their USA branch Don't speak English Duplicate supplier Very small capacity for domestic sales only
- 13. 13 • Post pre-screeningthe suppliers, • RFI-RFQ process was administered to filter out most capable suppliers, Supplier Profile example
- 14. 14 RFI process wasadministered to filter out most capable suppliers Supplier Profile example
- 15. 15 - Category specifictechnical questions were added in the RFI to understand supplier capability and capacity. Supplier Profile example
- 16. # Item# Product& box picture Description Dimensions (HxWxD) Reference Finished material Shelf Capacity Annual Qty in units Ex- work Price in USD/U nit FOB Price in USD/U nit Produc tion lead time in (Weeks ) MOQ Packag ing Units in 20'ft container (loading capacity) 1 Product 1 BLK Black Steel Heavy Duty 5-Shelf Shelving Unit, 4000lbs Capacity with Wooden/particle board shelves 72' height, 36' width, 18' depth •10 each 36 inch beams •10 each 18 inch braces •8 each 36 inch posts • XX • XX • XX Each shelf must hold 363KG or 800 pounds 500,000 2 Product 2 WGB steel shelving in silver vein, 4000lbs Capacity with Wooden/particle board shelves 72' height, 48' width, 24' depth Each shelf must hold 363KG or 800 pounds 250,000 16 Part of the RFQ sheet, • Cost sheet was sent to the suppliers,
- 17. 17 Part of theRFQ sheet, • Cost sheet was sent to the suppliers, # Componen ts - Angles Part number Drawing name Description Steel Thickness Part weight in KGS Annual Deman d in PCS Ex-work Price in USD/PC FOB Price in USD/PC Producti on lead time in (Weeks) MOQ Can you offer required steel thickness PCS in 20'ft container (loading capacity) 1 Component s "Z BEAM" styles Part # 1 XX 18" BEAM XX XX XX Part # 2 XX 24" BEAM XX XX XX Part # 3 XX 36" BEAM XX XX XX Part # 4 XX 48" BEAM XX XX XX Part # 5 XX 60" BEAM XX XX XX 2 POSTS - Slotted Angles Part # 6 XX 30" POSTS XX XX XX Part # 7 XX 36" POSTS XX XX XX Part # 8 XX 39" POSTS XX XX XX
- 18. Process Steps HungaryPoland Slovakia Czech Rep Bulgaria Slovenia Romania Serbia Croatia. India Total Supplier Identification • Suppliers identified 12 33 9 19 11 11 32 23 19 65 234 Pre- screening Completed • Supplier passed pre- screening XX XX XX XX XX XX XX XX XX XX 60 • Suppliers failed Pre- screening XX XX XX XX XX XX XX XX XX XX 174 RFI-RFQ Administration Completed • RFI-RFQ sent XX XX XX XX XX XX XX XX XX XX 60 • RFI-RFQ received XX XX XX XX XX XX XX XX XX XX 20 • Don't intend to respond XX XX XX XX XX XX XX XX XX XX 40 18 - Supply market analysis country wise was shared in the weekly progress and final RFI/RFQ report,
- 19. 59% 57% 60%61% Supplier1-IN Supplier2-IN Supplier3-PL Supplier4-IN Supplier5-IN Supplier6-IN Supplier7-IN Supplier8-PL Supplier9-IN Supplier10-IN Supplier11-IN Supplier12-IN Supplier13-IN Supplier14-IN Supplier15-IN Supplier16-PL Supplier17-IN Supplier18-PL Supplier19-PL Supplier20-PL RFI Scoring Chart RFQ- Product Capability Score Production Score Quality management Score Business information Score Certificate, documents and pictures Score Corporate Social Responsibility Score 19 Average RFI scoring: 62% 75% 72% 71% 70% 69% 68% 67% 66% 65% 64% 63% 63% 62% 55% 51% 29% Suppliers Assessment, - Suppliers were assessed and ranked based on their Company profile, - Scoring and ranking of the suppliers were done on the e-sourcing tool GSP,
- 20. # Supplier Countr y RFI Score % Export license Main Producing items Process:In-house Can offer boltless shelving as per RFQ designs Can offer component s (Beam and Post - Angles) Items offered from RFQ, Certification, Yes/No Rivetin g Powder coating Complete units Component s Supplier similar boltless range available 1 Supplier 1 India 75 Yes Sheet metal components and assemblies Yes Yes Yes Yes Yes Yes No ISO 9001 certified only 2 Supplier 2 India 72 Yes Steel doors, steel windows, racks. Yes Yes Yes Yes Yes Yes No ISO 9001, ISO 14001 & OHSAS 18001 3 Supplier 3 Poland 71 Yes metal shelving's, aluminum ladders, safes, metal boxes, metal furniture Yes Yes Yes Yes Yes Yes Yes ISO 9001 certified only 4 Supplier 4 India 70 Yes Storage system Yes Yes Yes Yes Yes Yes No ISO 9001 certified only 5 Supplier 5 India 69 Yes All types of racks Yes Yes Yes Yes Yes Yes No ISO 9001 certified only 6 Supplier 6 India 68 Yes Steel shelving racks Yes Yes Yes Yes Yes Yes No ISO 9001 certified only 7 Supplier 7 India 67 Yes XX XX XX XX XX XX XX XX XX 8 Supplier 8 Poland 66 Yes XX XX XX XX XX XX XX XX XX 9 Supplier 9 India 65 Yes XX XX XX XX XX XX XX XX XX 10 Supplier 10 India 64 Yes XX XX XX XX XX XX XX XX XX 11 Supplier 11 India 63 Yes XX XX XX XX XX XX XX XX XX 12 Supplier 12 India 63 Yes XX XX XX XX XX XX XX XX XX 13 Supplier 13 India 62 Yes XX XX XX XX XX XX XX XX XX 14 Supplier 14 India 61 Yes XX XX XX XX XX XX XX XX XX 15 Supplier 15 India 60 Yes XX XX XX XX XX XX XX XX XX 16 Supplier 16 Poland 59 Yes XX XX XX XX XX XX XX XX XX 17 Supplier 17 India 57 Yes XX XX XX XX XX XX XX XX XX 18 Supplier 18 Poland 55 Yes XX XX XX XX XX XX XX XX XX 19 Supplier 19 Poland 51 Yes XX XX XX XX XX XX XX XX XX 20 Supplier 20 Poland 29 Yes XX XX XX XX XX XX XX XX XX 20 - Executive summary with key information was shared with the client,
- 21. 21 - Suppliers companyprofiles as per ranking wise were shared in the final report. RFI Score 75% RFI Ranking 1
- 22. 22 - Recommended supplierslocation was shared on the map
- 23. Next Steps wassuggested to the client Actions Responsible Deadline Remarks 1. Collect similar samples from recommended suppliers DS/Client - Process to start immediately. 2. Send original samples to recommended suppliers Client - Process to start immediately. 3. On site audit (Technical/ Social/ or Hybrid model) DS and/or Client - To be confirmed 4. XX DS and/or Client - XX 5. XX DS and/or Client - XX 6. XX DS and/or Client - XX Below are the proposed next steps with responsibilities. 23
- 24. 242424242424242424 Agenda 1. Sourcing ProjectIntroduction 2. Sourcing Approach 3. Conclusions
- 25. Conclusions Whole projectwas carried out in 8 weeks with 234 suppliers identified & 20 complete RFI-RFQ received. All the recommended suppliers are certified with quality management certification. All the recommended suppliers had key production process in-house including powder coating facility. Indian suppliers were currently not doing boltless designs however they are willing to develop/customize as per client requirement. Sampling process was initiated with the recommended suppliers. A plan was framed to audit the recommended suppliers as a next step post sampling. Overall based on our report, It helped client to identify potential suppliers with some substantial savings ** Dragon Sourcing has experienced team for performing Technical and Social Corporate Responsibility (CSR) audit or hybrid model combing both. 1525