Vietnam could be your next sourcing destination for textile sourcing. This case study will help you to know the scope of textile product sourcing in Vietnam. To know more visit: http://www.dragonsourcing.com/vietnam-sourcing/

1. Client Case study
April 2010
Dragon Sourcing - 龙 源
Your Tailored Sourcing Approach to Asia

2. Agenda
A. Context and Products
B. Sourcing Strategy
C. Results & Conclusions
2© 2010 Dragon Sourcing. All rights reserved.

3. Context
• Major international fashion retailer
– 1,900 stores in 35 countries (in Europe, Asia and United States)
– 73,000 employees
– USD 10 billion turnover in 2008
• Stores opening growing by 10-15 % per year
• Interested in identifying and qualifying new potential competitive suppliers in Vietnam,
specialised in the manufacturing of shoes and garments (Blazers, suits, parkas, jackets, ladies
fashion wear, jeans)
• Selected Dragon Sourcing as Procurement Service Provider responsible for managing the
Vietnam supplier qualification process
3© 2010 Dragon Sourcing. All rights reserved.

4. Products included in the project scope were the following
GarmentsShoes
4© 2010 Dragon Sourcing. All rights reserved.

5. Agenda
A. Context and Products
B. Project Approach
C. Results & Conclusions
5© 2010 Dragon Sourcing. All rights reserved.

6. • Analyse spend category in detail
– Specifications and quality
requirements
– Volumes
– Deadlines
• Analyse supply market and
identify potential suppliers
• Pre-qualify potential suppliers
through an RFI process
• Manage RFQ process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(FOB price, logistics, import
duties, ADT,..)
• Shortlist suppliers based on
RFI/RFQ process
• Select 2-3 suppliers/product for
sample development process
• Manage sample development
process
• Audit shortlisted suppliers
• Make a report of audited suppliers
• Build supplier profiles
• Finalise supplier selection
© 2010 Dragon Sourcing. All rights reserved.
Dragon Sourcing service offering covers the end-to-end sourcing process
Supplier Identification and pre-
qualification
Similar samples acquisition Supplier audits
Keyactivities

7. © 2010 Dragon Sourcing. All rights reserved.
Supplier Identification and pre-
qualification
Similar samples acquisition Supplier audits
Keyactivities
Dragon Sourcing service offering covers the end-to-end sourcing process
• Analyse spend category in detail
– Specifications and quality
requirements
– Volumes
– Deadlines
• Analyse supply market and
identify potential suppliers
• Pre-qualify potential suppliers
through an RFI process
• Manage RFQ process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(FOB price, logistics, import
duties, ADT,..)
• Shortlist suppliers based on
RFI/RFQ process
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Audit shortlisted suppliers
• Make a report of audited suppliers
• Build supplier profiles
• Develop Business case and
implementation plan

8. © 2010 Dragon Sourcing. All rights reserved.
The first step is to develop a comprehensive understanding of the product
requirements
Product Name Ladies Coat Cutie
Picture
Annual Quantity (pcs) 40,000
Measurement Please refer to MEASUREMENT LIST V1357-1
Fabric technical data
piggeline fabric, callipo fabric GPG08-2565, 55%wool+35%visc+10%poly Fully lined in T210 polyester DTM
Polyester 100%
Color 09-090 black
Accessories
Hanger loop in self fabric, satin binding in contrast colour around halfmoon,
Plastic shiny buttons size 44lin soft shoulder pad hook and eye metall,
Halfmoon in self fabric
For more details Please see Development request

9. © 2010 Dragon Sourcing. All rights reserved.
Then a comprehensive database of potential suppliers is built
Activity Vietnam
Product category Blazers and suits Parkas and jackets
Ladies fashion
wear
(light blouses &
dresses)
Jeans
"Vulcanized /
group" for ladies
fashion shoes
"Injection group"
for ladies fashion
shoes
Suppliers initially
identified
220 171
RFI/RFQ sent-out 13 46 22 19 22 6
Suppliers intending to
respond
8 19 8 10 11 6
RFI/RFQ declined/
discarded
5 27 14 9 11 0
RFI/RFQ received 8 19 8 10 11 6
Date issuing RFI/RFQ 4th
Feb
Deadline for suppliers
answers 19th
March

10. © 2010 Dragon Sourcing. All rights reserved.
An RFI/RFQ process is administered to filter out the most capable suppliers
Product Name Quantity
Gross weight per
carton(in kg)
Total No.of
set/20'container
Total No.of
set/40'container
Product Size
Sample Charge in
US$
EXW US$ price per set
FOB US$ price per
set
FOB port Delivery Time Payment Term
产品名 需求量 毛重/ 箱（公斤） 20尺柜的装箱量 40尺柜的装箱量 产品尺寸 样品费( 美元) 出厂美元单价( 一套)
FOB 美元单价(一
套)
FOB港口 交货时间 付款条件
Set 1:
Set 2:
Set 3:
Logistics Information 物流信息
Set of 3 PP
trolley suitcases
PP聚丙烯手推旅
行箱3件套
9000套（3
件套）
Product Name Quantity Material Size Color Accessory Packaging Carton Size (L×W×H)
产品名 需求量 材料 尺寸 色颜 附件 包装 板箱尺寸纸
Set 1:
Set 2:
Set 3:
9000 套（3
件套）
General Information概述
Ladies
fashion wear
(light blouses
& dresses)
女装
Request For Information 征询单
Confidential 保密
To 收件人:
Email 电子邮件:
Tel number 电话:
Mobile 手提电话
Fax number 传真:
SUPPLIER NAME 公司名称
Adress 地址- 街道
City 城市
Province 省
Zip code 邮政编码
Contact person 联系人
Job title 头衔
email 电子邮件
Phone number 电话
Fax number 传真
Website 网址
Which year was your company founded?
贵司是在哪一年成立的？
Ownership
所有权
Capital in million RMB
固定资产（百万人民币）
What is the workfloor size (m²)?
贵司工厂面积有多少平方米？
How many employees do you have?
贵司员工总数有多少？Do you have a good English speaker and writer in your factory?
(Y/N)
贵司是否有可用英语进行书面及口语交流的人员？(是/否)How many years have you been in the PP trolley suitcase
business?
贵司从事PP拉杆旅行箱生产有多少年？
Do you have an export license ?
是否持有进出口许可证 ?
Europe USA Others
% of turnover exported to
出口占销售百分比
CONTACT DETAILS INFORMATION 联系方式
GENERAL INFORMATION 概况
DRAGON SOURCING 龙源有限公司上海代表处
Rachel Yao 姚瑛莹
yingying.yao@dragonsourcing.com
021 - 6141 3974
021 - 6141 3966
159 00 89 89 18
BUSINESS INFORMATION 公司规模
Contact detail
information
Business
information
Logistics
information
Product and price
information
Ladies fashion
wear
(light blouses &
dresses)
女装

11. © 2010 Dragon Sourcing. All rights reserved. 11
Then all relevant information is collected to prepare FOB prices calculation
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
Supplier 7
Supplier 8
Supplier
Lady fashion Shoes Ref 1
FOB unit price
in USD
Mould cost Total
in K USD
Supplier 1 3.10 6,200 167
Supplier 2 3.70 3,500 198
Supplier 3 5.21 400 236
Supplier 4 5.54 2,240 278
Supplier 5 6.21 290 320
Supplier 6 6.24 3,100 365
Supplier 7 n/a n/a n/a
Supplier 8 n/a n/a n/.a
Current FOB price 3.84 N/A 137

12. © 2010 Dragon Sourcing. All rights reserved.
Finally, suppliers’ quotation are compared to target prices to identify those
worth keeping in the process
Supplier 1 Supplier 3 Supplier 4 Supplier 5 Supplier 6Supplier 2
Lady fashion Shoes ref 1
USD FOB price comparison
3.10
3.70
5.21 5.54
6.21 6.24

13. © 2010 Dragon Sourcing. All rights reserved.
Feasibility Analysis Similar samples acquisition Procurement Operations
Keyactivities
Dragon Sourcing service offering covers the end-to-end sourcing process
• Analyse spend category in detail
– Specifications and quality
requirements
– Volumes
– Deadlines
• Analyse supply market and
identify potential suppliers
• Pre-qualify potential suppliers
through an RFI process
• Manage RFQ process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(FOB price, logistics, import
duties, ADT,..)
• Shortlist suppliers based on
RFI/RFQ process
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Audit shortlisted suppliers
• Make a report of audited suppliers
• Build supplier profiles
• Develop Business case and
implementation plan

14. © 2010 Dragon Sourcing. All rights reserved.
A closer look on collected samples shows slight feature differences among
different suppliers
Supplier Name
Product detailed description : Lady coat
Measurement Fabric technical data Colors Accessories
Current product
Please refer to
MEASUREMENT LIST
V1357-1
Piggeline fabric,
Callipo fabric GPG08-2565,
55%wool+35%visc+10%poly
Fully lined in T210 polyester DTM
Polyester 100%
Black
Hanger loop in self fabric,
Satin binding in contrast color around
halfmoon,
Plastic shiny
buttons size 44lin
Soft shoulder pad
Hook and eye metall
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6

15. The RFI/RFQ and “identical sample” process result in a short-list of
potential new qualified suppliers
Qualification of suppliers through RFI/RFQ Analysis of offers and samples
Potential
Supplier
1
Potentia
l
Supplier
2
Potential
Supplier
3
Potentia
l
supplier
4
Price
Prod. 1 26.4 23.8 24.9 24.6
Prod. 2 36.1 33.8 34.9 33.7
Prod. 3 13.4 15.1 12.2 12.8
Prod. 4 40.2 38.1 41.3 38.4
Region Vietnam Vietnam Vietnam Vietnam
Turnover (M€) 6 14 8 19
Staff 350 700 430 880
Capabilities 100/day 120/day 75/day 140/day
Cooperation Good Good Average Good
Samples
Pre-qualified
suppliers Potential new
qualified
suppliers
Potential suppliers
RFI/RFQ
process Sampling
process
15© 2010 Dragon Sourcing. All rights reserved.

16. © 2010 Dragon Sourcing. All rights reserved.
Feasibility Analysis
Supplier Selection
and Contracting
Supplier audits
Keyactivities
Dragon Sourcing service offering covers the end-to-end sourcing process
• Analyse spend category in detail
– Specifications and quality
requirements
– Volumes
– Deadlines
• Analyse supply market and
identify potential suppliers
• Pre-qualify potential suppliers
through an RFI process
• Manage RFQ process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(FOB price, logistics, import
duties, ADT,..)
• Shortlist suppliers based on
RFI/RFQ process
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Audit shortlisted suppliers
• Make a report of audited suppliers
• Build supplier profiles
• Develop Business case and
implementation plan

17. © 2010 Dragon Sourcing. All rights reserved.
Short-listed suppliers are audited to finalise the qualification process
Audit
questionnaire
Audit report
Audit
summary
Objectives
• Meet top management and sales management teams
• Present order details
• Refine supplier offer understanding
• Understand organisation
• Validate manufacturing capabilities
• Visit factory and check work conditions
Topics
• General Management
• Order management
• Shipping / packaging
• Planning process
• Goods flow
• Procurement
• Purchasing
• Production
• Quality…

18. © 2010 Dragon Sourcing. All rights reserved.
Collected information is shared with customer through detailed audit reports
GENERAL INFORMATION
Supplier Name Supplier 1
City
Province Vinh Long
Contact person
Job title Senior Manager
Email eleanor@xxxxx.com.tw
Phone number +886-4-xxxxxxxx #120
Fax number +886-4-xxxxxxxx
Mobile +886-921-xxxxxx
Website N/A
BUSINESS INFORMATION
Found Year 1986
Ownership Joint Venture
Manufacturer, distributor, or agent Manufacturer
Capital in million US$ N/A
Work floor size (m²) 330,000
Number of employees 10,000
License for self import/export (Yes/No) Yes
Years of export experience 24
MAIN PRODUCTS
Products Yes/No % of production
"Vulcanized / Injection group" for
ladies fashion shoes
Yes 100%
Others (please mention)
TURNOVER IN US$
2009 (Estimated) 2008 2007
N/A N/A N/A
% SALES EXPORT TO MAIN MARKETS IN 2009
US (%) EU (%) Asia (%) Total (%)
40% 30% 5% 75%
CUSTOMER BASE
Customers Country Percentage of sales
1. Converse Worldwide 60%
2. Adidas Worldwide 17%
3. Cat Worldwide 10%
4. Columbia Worldwide 8%
5. Paul Smith Worldwide 5%
QUALITY & ENVIRONMENTAL REGISTRATION
Certificate Yes/No
ISO 9001 Yes
ISO 14001 Yes
ISO 18001 Yes
COMPLIANCE WITH LOCAL LAW
Are you aware of Better Work Vietnam program? (Y/N) Y
Are you willing to participate in the Better Work Vietnam program in the future? (Y/N) Y
Do you adhere to all rules and regulations in respect to child labor laws? (Y/N) Y
Do you adhere to all rules and regulations in respect to environmental issues? (Y/N) Y
Do you adhere to all rules and regulations in respect to health and safety issues? (Y/N) Y
Are you willing to sign a confidentiality agreement? (Y/N) Y

19. © 2010 Dragon Sourcing. All rights reserved. 1919
Collected information is shared with customer through detailed audit reports
FACTORY PICTURES

20. © 2009 Dragon Sourcing. All rights reserved.
The final supplier selection relies on the short-listed suppliers’ offers, audits and
sample quality
Suppliers’ quotation
Samples
Audit summary
Supplier
summary
Supplier
capabilities
Supplier
assesment
Supplier
Name
Final
Ranking
Supplier 1 1
Supplier 2 4
Supplier 3 2
Supplier 4 5
Supplier 5 3

21. Agenda
A. Context and Products
B. Sourcing Strategy
C. Results & Conclusions
21© 2010 Dragon Sourcing. All rights reserved.

22. Qualification process resulted in the client selecting 7 new suppliers from
Vietnam
Activity Vietnam
Product category Blazers and suits
Parkas and
jackets
Ladies fashion
wear
(light blouses &
dresses)
Jeans
"Vulcanized /
group" for ladies
fashion shoes
"Injection group"
for ladies fashion
shoes
Suppliers initially
identified
220 171
RFI/RFQ received 8 19 8 10 11 6
Suppliers provided
competitive quotes
3 11 4 6 6 2
Competitive suppliers
successfully passed
DS and client audit
3 8 3 4 5 2
Selected Vietnamese
suppliers to start
production order
1 2 1 2 1 1