You can choose Vietnam to outsource commercial automotive parts. In present scenario Vietnam could be one of your best choice for sourcing activities. To know more visit: http://www.dragonsourcing.com/vietnam-sourcing/

1. Vietnam Case study for Commercial Automotive Parts
May, 2015
Dragon Sourcing - 龙 源
Your Tailored Sourcing Approach to LCC Sourcing

2. Agenda
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1. Context
2. Sourcing Strategy
3. Results

3. Context
 One of the European leading manufacturers and distributors of automotive Breaking and
Transmission systems
 Selected Dragon Sourcing to arrange the visit to manufacturing factories of 6 categories in
Vietnam
• Electronic & Mechatronic
• Plastic & Rubber
• Aluminum Pressure Casting
• Iron Casting
• Process Metal
• Mechanical Parts
 ..with the objective of identifying and qualifying new competitive suppliers in Vietnam
© 2015 Dragon Sourcing. All rights reserved. 3

4. © 2015 Dragon Sourcing. All rights reserved. 4
• Weekly report update overall progress on
all categories
• Emails exchange to provide information on
the product spec and drawings, list of visit
participants, list of suppliers’ questions…
• CEO conference to obtain main decisions
and discuss planned actions & project
status
Dragon SourcingClient
DS CEO
DS Country Manager
Vice President Sourcing
and Purchasing
Group Commodity
Director
Global Commodity
leader
Category Buying
Engineer
The sourcing program was managed by Vietnam Dragon Sourcing buyers
Senior Buying
Analyst
Buying Analyst
Buying Analyst
Buying Analyst
Business Unit
Purchasing leader
Business Unit
Purchasing leader
Regional Purchasing
leader
Regional Purchasing
leader

5. Agenda
© 2015 Dragon Sourcing. All rights reserved. 5
1. Context
2. Sourcing Strategy
3. Results

6. © 2015 Dragon Sourcing. All rights reserved. 6
• Analyse client drawings and specifications
• Analyse supply market and identify
potential suppliers
• Pre-screening potential suppliers through
telephone based on client’s criteria
• Contact suppliers to see whether they are
able to welcome guest during the planned
time
Step 1
Supplier identification and
pre-qualification
• Finalize suppliers list for Selection
• Make a report of shortlisted suppliers,
send to client for final selection
• Arrange appointments
• Make visit schedule and budget
• Arrange logistic details
• Accompany clients during visits
Step 2
Supplier selection and visit arrangement
Keyactivities
Dragon Sourcing went through the following 2 stage process

7. The first step was to develop a comprehensive understanding of the 6 sourcing
categories
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Category Category products
Electronic and Mechatronic Printed Circuit Board, Printed Circuit Board Assembly, Solenoid and Sensors, etc
Plastic and Rubber Plastic Injection products and Rubber parts
Aluminum Pressure Casting Aluminum Die Casting Products
Iron Casting Forging and Sintering parts, Ductile and Grey Iron Casting Products
Process Metal Metal stamping and turning parts
Mechanical Parts Motor, Cable, Connector and Connector Frame, Wire Harness, etc

8. Example product drawing
..and collect the requirements of each specific category
Example – Iron Casting
© 2015 Dragon Sourcing. All rights reserved. 8
Category Iron Casting
No of
sourcing
items
10
Yearly
Quantity
for these
10 items
(pcs)
> 2,000,000
Total
spend for
these 10
items/year
(Euro)
9,695,000
Example product drawing

9. © 2015 Dragon Sourcing. All rights reserved. 9
then an extensive supplier data base was built leveraging multiple sources of
information
Company information
No Company Name Website Contact person Email Tel Mobile Address City
1 Supplier 1 www.xxxvn.com Ms Ha levietha@xxxvn.com 84 4 3875xxxx 84 936 49xxxx Sai Dong B IP Hanoi
2 Supplier 2 Ms Thuy xxx.sales@gmail.com 84 241 363xxxx 84 94880xxxx Que Vo IP Bac Ninh
3 Supplier 3 www.xxxplastics.com Mr. Trung leminhtrung@xxxplastics.com 84 8 3756xxxx 84 90948xxxx Binh Tan HCM
4 Supplier 4 www.xxx.com Mr. Tuan tuan@xxx.com 84 61 383xxxx 84 91946xxxx Bien Hoa 2 IP Dong Nai
5 Supplier 5 Mr. Duong xxx@yahoo.com.vn 84 91313xxxx Ho Nai IP Dong Nai
6 Supplier 6 www.xxxdiecasting.com Mr. Mành xxx@hcm.vnn.vn 84 72 363xxxx 84 90382xxxx Thuan Dao IP Long An
7 Supplier 7 www.xxx.com.vn Mr. Ninh vietninh@xxx.com.vn 84 4 3881xxxx 84 165610xxxx Thang Long IP Hanoi
8 Supplier 8 www.xxxparts.com.vn Ms Chi chi.nguyenminh@xxxparts.com.vn 84 321 399xxxx 84 91320xxxx Hung Yen Hung Yen
9 Supplier 9 www.xxx.com.vn Mr. Hoang john.hoang@xxx.com.vn 84 211 384xxxx 84 96361xxxx Khai Quang IP Vinh Phuc
10 Supplier 10 www.xxxvn.com Mr Chuan chuan.tranvan@xxxvn.com 84 61 368xxxx 84 91248xxxx Long Thanh Dong Nai
11 Supplier 11 www.xxx.com.vn Mr. Vũ quynhtt@xxx.com.vn 84 8 6267xxxx 84 91810xxxx Binh Chanh HCM
12 Supplier 12 www.xxx-tech.com Mr. Hung hung@xxx-tech.com 84 61 398xxxx 84 919 25xxxx Ho Nai IP Dong Nai

10. A telephone pre-screening process was then carried out to select the suppliers
to be included in the RFI/RFQ process
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Criteria Products Certificate Export Experience Quality Control
All Categories
Suppliers should have
experience in producing
for Automotive Industry
Suppliers should
have or are going to
have ISO/TS16949
Suppliers should have direct
export experience, not sell
to traders who export.
Suppliers should have
quality control capability in-
house.

11. Out of 167 suppliers initially identified, 62 suppliers were shortlisted
© 2015 Dragon Sourcing. All rights reserved. 11
Main reason for not being shortlisting
- Can’t meet the required criteria
- Don’t speak English
- Don’t want to export
- Small factories, low-quality products
Reason for not able to welcome guests
- Management board isn’t in factories during the
time for Lunar New Year holiday
- No capacity for new customers
- Want sample or detailed drawings in advance
Identified Passed Phone Screening Shortlisted for Visits

12. © 2015 Dragon Sourcing. All rights reserved. 12
Keyactivities
• Finalize suppliers list for Selection
• Make a report of shortlisted suppliers,
send to client for final selection
• Arrange appointments
• Make visit schedule and budget
• Arrange logistic details
• Accompany clients during visits
• Shortlist Suppliers for Clients formal
Audits
Step 2
Supplier selection and visit arrangement
We then moved to 2 stage of the process
• Analyse client drawings and specification
• Analyse supply market and identify
potential suppliers
• Pre-screening potential suppliers through
telephone based on client’s criteria
• Contact suppliers to see whether they are
able to welcome guest during the planned
time
Step 1
Supplier identification and
pre-qualification

13. © 2015 Dragon Sourcing. All rights reserved.
Simple Company Profiles were developed based on info collected during RFI
13
Contact information
Company name Supplier
Address Xa Tan Thanh Dong, Huyen Cu Chi, HCMC
Website www.xxx.com.vn
Contact person Mr. Dang Lam Van (sales executive)
Tel/ Mobil
84-8 3961 xxxx
Mobil: 84 168537xxxx
E-mail danglamvan@xxx.com
Company background
Year Founded 1978
Ownership State owned
Registered Capital 15 mil USD
Main Service Technical rubber parts
Work floor size (m²) 30,000
Number of employees 2,500
Business overview
Turnover 2014 > 28 million USD
% sold to automotive market N/A
% sold to commercial/truck
automotive market
N/A
% export to western companies
(EU, US, Japan)
40%
Client names
Skellerup, Gold Star, Pacific, ESP, East West, Misubishi,
Molten, Sanyo, Aichi, Harada, fujikura, Suzuki.
Key certifications ISO 9001, ISO 14001, ISO/TS 16949
Picture

14. 29 Vietnam suppliers were finally selected for client visits. There were 23 client buyers
and 6 DS staffs divided into 6 teams for 6 different itineraries
© 2015 Dragon Sourcing. All rights reserved. 14
No. Province City Supplier name Product
Visited
by Team
1 Hai Duong Cam Giang Supplier 1 Printed Circuit Board 1
2 Hanoi Thach That Supplier 2 Printed Circuit Board 1
3 Binh Duong Thuan An Supplier 3
Printed Circuit Board
Assembly
1
4 Ho Chi Minh District 7 Supplier 4
Solenoide and
Solenoide valves
1
5 Binh Duong Thuan An Supplier 5 Printed Circuit Board 1
6 Ho Chi Minh Cu Chi Supplier 6 Technical rubber parts 2
7 Dong Nai Bien Hoa Supplier 7 Rubber parts 2
8 Dong Nai Trang Bom Supplier 8 Rubber parts 2
9 Dong Nai Bien Hoa Supplier 9 Plastic injection 2
10 Ho Chi Minh Binh Tan Supplier 10 Plastic injection 2
11 Dong Nai Bien Hoa Supplier 11 Aluminum Die Casting 3
12 Hanoi Long Bien Supplier 12 Aluminum Die Casting 3
13 Hung Yen Van Lam Supplier 13 Aluminum Die Casting 3
14 Dong Nai Ho Nai Supplier 14 Aluminum Die Casting 3
No. Province City Supplier name Product
Visited
by Team
15 Ho Chi Minh Cu Chi Supplier 15 Metal Machining 4
16 Ho Chi Minh Binh Chanh Supplier 16
Iron and Ductile Iron
Casting
4
17 Hai Phong Hong Bang Supplier 17
Iron and Ductile Iron
Casting
4
18 Ho Chi Minh Nha Be Supplier 18
Iron and Ductile Iron
Casting
4
19 Ho Chi Minh Binh Chanh Supplier 19 Metal Machining 4
20 Binh Duong Thuan An Supplier 20
Metal Stamping and
Injection
5
21 Binh Duong Thuan An Supplier 21
Metal Stamping and
Processing
5
22 Binh Duong My Phuoc Supplier 22
Metal Stamping,
Welding, Painting,
etc
5
23 Dong Nai Ho Nai Supplier 23
Metal Stamping and
Processing
5
24 Dong Nai Song May Supplier 24
Metal Stamping and
Processing
5
25 Ho Chi Minh Tan Phu Supplier 25 Wire Harness 6
26 Ho Chi Minh District 7 Supplier 26
Power cord and
Cable Assembly
6
27 Ho Chi Minh District 7 Supplier 27 Mechanical parts 6
28 Binh Duong Thuan An Supplier 28 Wire Harness 6
29 Dong Nai Bien Hoa Supplier 29 DC motor 6

15. © 2015 Dragon Sourcing. All rights reserved. 15
Visit objectives and agenda announced to suppliers
Objectives
• Meet top management and sales management teams
• Understand demand and supply capabilities
• Visit factory and check work conditions
• Discuss cooperative abilities
Agenda:
• Welcome: Personal introduction of participants. 10 min
• Client Introduction: Corporate presentation. 25 min
• Supplier Introduction: Corporate presentation. 25 minutes
• Line tour. 90 min
• Business discussion. 20 min
• Wrap up and conclusion. 10 min

16. Agenda
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1. Context
2. Sourcing Strategy
3. Results

17. © 2015 Dragon Sourcing. All rights reserved. 17
Out of 29 suppliers visited, client was satisfied with 21 suppliers
8 suppliers were eliminated after supplier visits
- Unable to provide client’s products
- Poor working conditions
- Don’t have required certificates and don’t intend to get these
certificates

18. © 2015 Dragon Sourcing. All rights reserved. 18
Potential savings based on RFQ range from 7% to 16% (€4,2M to €9,6M per year)
No of items
sourced per
category
Current yearly spend
per category (Euro)
Potential
savings per
category (%)
Potential yearly savings
(Euro)
Electronic and Mechatronic 12 24,829,000 7-16% From 1,738,030 to 3,972,640
Plastic and Rubber 10 7,152,000 8-16% From 572,160 to 1,144,320
Aluminum Pressure Casting 5 6,962,000 6-15% From 417,720 to 1,044,300
Iron Casting 10 9,695,000 6-18% From 581,700 to 1,745,100
Process Metal 10 7,277,000 8-15% From 582,160 to 1,091,550
Mechanical Parts 3 4,198,000 8-15% From 335,840 to 629,700
Total 50 60,113,000 7-16% From 4,227,610 to 9,627,610