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Dragon Sourcing
Your Tailored Sourcing Approach to Emerging Markets
Hat Sourcing - Case Study
27th Aug, 2015
Lynn Fan
Tel: +86 21 61413965
Mob: +86 (0) 15900898910
Email: Lynn.fan@dragonsourcing.com
1
© 2015 Dragon Sourcing. All rights reserved.
1. Introduction
2. Category Demand Analysis
3. Supply Base Response
4. Quotation Analysis
5. Supplier Recommendation
2
Agenda
© 2015 Dragon Sourcing. All rights reserved.
3
1. Objectives & Scope
Objectives
Objectives was to secure
savings through consolidating
procurement and sourcing
direct from manufacturers in
emerging markets
Geographies included:
China, Vietnam, India, Bangladesh, Turkey
© 2015 Dragon Sourcing. All rights reserved.
4
1. 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
© 2015 Dragon Sourcing. All rights reserved.
5
1. 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 Client buyers, of all the suppliers. Focus is
management, logistics, production & quality.
 Completed Audit
Questionnaires
9.
Analyze 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 Client.
 Contract(s)
Milestone 4: Contracts Secured
Phase 2: Selection & Contracting
© 2015 Dragon Sourcing. All rights reserved.
Phase 1: Supplier Pre-qualification
Steps
Duration/week
commencing
Week 1
June 8 ~ 12
Week 2
June 15 ~ 19
Week 3
June 22 ~ 26
Week 4
June 29 ~ July 3
Week 5
July 6 ~ 10
Week 6
July 13 ~ 17
Week 7
July 20 ~ 24
Week 8
July 27 ~ 31
Phase1
1. Demand Analysis 1
2. Supply Market Analysis 2
3. Telephone pre-screening 1
4. Develop RFI/RFQ 1
5. Administer RFI/RFQ 4
6. Analyze RFI/RFQ Responses 2
1. Schedule
Not started Done
In process Delay
Phase 1 (Supplier pre-qualification): 8 weeks
1 RFI/RFQ Approved
Shortlist for
Audit Agreed
2
6© 2015 Dragon Sourcing. All rights reserved.
1. Introduction
2. Category Demand Analysis
3. Supply Base Response
4. Quotation Analysis
5. Supplier Recommendation
7
Agenda
© 2015 Dragon Sourcing. All rights reserved.
© 2015 Dragon Sourcing. All rights reserved.
Category: Hats
Product Specification
Product description
Flex fit hat
Cowboy hat
Material Flex Fit Hat:
97% Cotton & 3% Spandex for Flex fit hats
Cowboy hat:
Raffia Straw & Paper Straw for Cowboy hats
Packing & Packaging Information
Packaging Description: 24 pcs per polybag for Flex fit hats
50 units per sleeve, 150 units per carton for Cowboy
hats
Number of pieces in a
20'container
32,000 pcs for Flex fit hats
6,400 pcs for Cowboy hats
Number of pieces in a
40'container
72,000 pcs for Flex fit hats
14,400 pcs for Cowboy hats
Product Picture
Flex Fit Hat
Cowboy Hat
1. Introduction
2. Category Demand Analysis
3. Supply Base Response
4. Quotation Analysis
5. Supplier Recommendation
9
Agenda
© 2015 Dragon Sourcing. All rights reserved.
105
73
40 31
6
41
17
6
1
35
14
6
3
1
30
24
8
4
20
6
2
1
0
50
100
150
200
250
No. of suppliers identified
and called
No. of suppliers passed
phone screening & included
in RFI/RFQ process
No. of suppliers intend to
respond
No. of RFI/RFQ responses
received
No. of suppliers
recommended for audit and
sampling
#ofsupplier
China India Bangladesh Vietnam Turkey
Progress review chart – Hats
231
10
134
62
40
7
© 2015 Dragon Sourcing. All rights reserved.
3. Supply Base Response
231 suppliers in 5 countries were identified leading to 7 suppliers recommended for audit and sampling.
11
20
62
© 2015 Dragon Sourcing. All rights reserved.
3. Supplier Geographic Distribution
Phone Screening - Failed reason
No. of
suppliers
% China India Bangladesh Vietnam Turkey
Not reachable, called many times, but no one answer the phone. 34 54% 14 1 15 1 3
Used to produce hats, but don't produce it any more. 23 37% 13 8 1 1
Doesn't export / Can't export, or only focus on domestic market 19 30% 11 1 1 6
Traders only, not a manufacturer. 8 13% 3 1 1 3
Duplicated supplier 5 8% 1 3 1
Stopped the business: Bankrupted, cease the operation or production…etc. 5 8% 3 1 1
Not interested in the project 2 3% 1 1
Only work for their mother company 1 2% 1
97 32 24 21 6 14
3. Phone Screening Rejection Reason Analysis
12
Phone screening - Rejection reason analysis
54%
37%
30%
13%
8%
8%
3% 2%
© 2015 Dragon Sourcing. All rights reserved.
RFI/RFQ - Failed reason
No. of
suppliers
% China India Bangladesh Vietnam Turkey
Promised to respond, but didn't respond before due date.(Some supplier need more time to respond.) 22 25% 9 5 3 4 1
Not interested in participating the selection process after reviewing the RFI/RFQ template. 17 18% 7 5 2 2 1
Too busy to reply or can't respond on time 10 10% 5 2 2 1
Can't reach supplier to follow up the RFI/RFQ completion status 8 8% 2 2 2 2
Not willing to proceed as they don't think their price will be competitive. 8 8% 8
Not willing to give company information (e.g. capacity, machine park, profit, ) through RFI at this stage. 7 7% 7
Can't find requested material in Vietnam for cowboy hat. 5 5% 5
Can't meet specification. 5 5% 2 1 2
They don't think they can meet the quality standard, need samples to check. 3 3% 3
Informed DS they cannot export directly or via agent after checking the RFQ. 2 2% 2
Have no production capacity free at the moment, engaged with current load, not able to respond to more orders. 2 2% 1 1
Unable to communicate in English, no English speaker 2 2% 2
Can't meet the function requirement: do not fade during the first 25 times of washing. 1 1% 1
Supplier think they can’t meet Molson Coors social compliance requirement. 1 1% 1
Supplier MOQ is the 20,000 pcs for one shipment. 1 1% 1
94 42 16 11 20 5
3. RFI/RFQ Rejection Reason Analysis
13
RFI/RFQ - Rejection reason analysis
25%
18%
10%8%
8%
7%
5%
5%
3% 2% 2%
2% 1% 1%
1%
© 2015 Dragon Sourcing. All rights reserved.
1. Introduction
2. Category Demand Analysis
3. Supply Base Response
4. Quotation Analysis
5. Supplier Recommendation
14
Agenda
© 2015 Dragon Sourcing. All rights reserved.
15
4. Quotation Analysis
FOB Price (supplier) Freight forwarding, customs & duties
DDP Price
+
Cargo Marine Insurance
FOB Price
Sea Freight
+
+
Import Duty
Local charges
+
Inland Truck
Transportation
cost
+ DDP Price=
+
1) Sea Freight: (Sea Freight cost received from DS forwarder on July 22nd, 2015, valid until July 31st 2015)
2) Local charges and Inland truck transportation cost: (Received from DS forwarder on July 22nd, 2015, valid until July 31st 2015)
3) Import duty rate was searched in different government websites:
© 2015 Dragon Sourcing. All rights reserved.
16
Recommended for audit and sampling Note: Suppliers with no score are the ones who didn't respond to RFI.
Loading quantity in 20’GP 32,000
Loading quantity in 40’GP 72,000
# Suppleir name RFI Score
FOB price
(in USD)
Country of
Origin
Ocean freight
(USD/container)
Insurance
(USD/pc)
CIF Price
(USD/pc)
Import
Duty
(USD/pc)
local charges
estimate
(USD / Container)
DDP Price
(USD/pc)
DDP mark up % based
on FOB
Saving % Saving Value in USD
20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP
Client Current Paid Price 2.08
1 Supplier 1 $1.05 China
3,560 4,320
0.006 0.006 1.167 1.116
0 655 705
1.19 1.13 13% 7% 43% 46% 22,334 23,889
2 Supplier 2 $1.20 China 0.007 0.007 1.318 1.267 1.34 1.28 12% 6% 36% 39% 18,564 20,119
3 Supplier 3 70 $1.30 China 0.007 0.007 1.419 1.367 1.44 1.38 11% 6% 31% 34% 16,051 17,606
4 Supplier 4 42 $1.34 China 0.008 0.007 1.459 1.407 1.48 1.42 10% 6% 29% 32% 15,045 16,600
5 Supplier 5 70 $1.35 China 0.008 0.007 1.469 1.417 1.49 1.43 10% 6% 28% 31% 14,794 16,349
6 Supplier 6 $1.39 China 0.008 0.008 1.509 1.458 1.53 1.47 10% 6% 27% 29% 13,789 15,344
7 Supplier 7 $1.47 China 0.008 0.008 1.590 1.538 1.61 1.55 10% 5% 23% 26% 11,778 13,333
8 Supplier 8 $1.50 China 0.009 0.008 1.620 1.568 1.64 1.58 9% 5% 21% 24% 11,024 12,579
9 Supplier 9 $1.55 China 0.009 0.009 1.670 1.619 1.69 1.63 9% 5% 19% 22% 9,768 11,323
10 Supplier 10 $1.64 China 0.009 0.009 1.760 1.709 1.78 1.72 9% 5% 14% 17% 7,506 9,061
11 Supplier 11 92 $1.65 China 0.009 0.009 1.771 1.719 1.79 1.73 9% 5% 14% 17% 7,255 8,809
12 Supplier 12 $1.66 China 0.009 0.009 1.781 1.729 1.80 1.74 8% 5% 13% 16% 7,003 8,558
13 Supplier 13 75 $1.68 China 0.009 0.009 1.801 1.749 1.82 1.76 8% 5% 12% 15% 6,501 8,056
14 Supplier 14 $1.68 China 0.009 0.009 1.801 1.749 1.82 1.76 8% 5% 12% 15% 6,501 8,056
15 Supplier 15 65 $1.74 China 0.010 0.010 1.861 1.810 1.88 1.82 8% 5% 10% 13% 4,993 6,548
16 Supplier 16 67 $1.75 China 0.010 0.010 1.871 1.820 1.89 1.83 8% 5% 9% 12% 4,741 6,296
17 Supplier 17 $1.79 China 0.010 0.010 1.911 1.860 1.93 1.87 8% 4% 7% 10% 3,736 5,291
18 Supplier 18 $1.80 China 0.010 0.010 1.921 1.870 1.94 1.88 8% 4% 7% 10% 3,485 5,040
19 Supplier 19 $1.85 China 0.010 0.010 1.972 1.920 1.99 1.93 8% 4% 4% 7% 2,228 3,783
20 Supplier 20 $1.85 China 0.010 0.010 1.972 1.920 1.99 1.93 8% 4% 4% 7% 2,228 3,783
21 Supplier 21 50 $1.93 China 0.011 0.011 2.052 2.001 2.07 2.01 7% 4% 3% 218 1,773
22 Supplier 22 $1.95 China 0.011 0.011 2.072 2.021 2.09 2.03 7% 4% 2% 1,270
23 Supplier 23 67 $2.00 China 0.011 0.011 2.122 2.071 2.14 2.08 7% 4% 13
24 Supplier 24 74 $2.00 China 0.011 0.011 2.122 2.071 2.14 2.08 7% 4% 13
25 Supplier 25 $2.26 China 0.013 0.012 2.384 2.332 2.40 2.34 6% 4%
26 Supplier 26 $2.35 China 0.013 0.013 2.474 2.423 2.49 2.43 6% 4%
27 Supplier 27 $2.50 China 0.014 0.014 2.625 2.574 2.65 2.58 6% 3%
28 Supplier 28 19 $2.00 India 3,130 4,250 0.011 0.011 2.109 2.070 2.13 2.08 6% 4% 38
29 Supplier 29 49 $2.50 Bangladesh
3,700 4,600
0.014 0.014 2.629 2.577 2.65 2.59 6% 3%
30 Supplier 30 50 $1.70 Bangladesh 0.010 0.009 1.825 1.773 1.85 1.78 9% 5% 11% 14% 5,888 7,455
31 Supplier 31 61 $3.50 Bangladesh 0.019 0.019 3.635 3.583 3.66 3.59 4% 3%
32 Supplier 32 50 $2.65 Vietnam
3,200 3,600
0.015 0.014 2.765 2.714 2.78 2.72 5% 3%
33 Supplier 33 66 $1.83 Vietnam 0.010 0.010 1.940 1.890 1.96 1.90 7% 4% 6% 9% 3,014 4,537
34 Supplier 34 61 $1.90 Vietnam 0.011 0.010 2.011 1.960 2.03 1.97 7% 4% 2% 5% 1,254 2,778
35 Supplier 35 $1.58 Vietnam 0.009 0.009 1.689 1.639 1.71 1.65 8% 4% 18% 21% 9,297 10,820
36 Supplier 36 $3.05 Turkey 2,850 3,600 0.017 0.016 3.156 3.116 3.18 3.13 4% 2%
© 2015 Dragon Sourcing. All rights reserved.
4. Quotation Analysis – Flex Fit Hat
2.08
1.19
1.34
1.44 1.48 1.49 1.53
1.61 1.64 1.69
1.78 1.79 1.80 1.82 1.82 1.88 1.89 1.93 1.94 1.99 1.99
2.07 2.09 2.14 2.14
2.40
2.49
2.65
1.71
1.96
2.03
2.78
1.85
2.65
3.66
2.13
3.18
70
42
70
92
75 65 67
50
67 74 66 61 50 50 49
61
19
(400)
(300)
(200)
(100)
0
100
$0.00
$1.00
$2.00
$3.00
$4.00
Currentpaidprice
Supplier1
Supplier2
Supplier3
Supplier4
Supplier5
Supplier6
Supplier7
Supplier8
Supplier9
Supplier10
Supplier11
Supplier12
Supplier14
Supplier13
Supplier15
Supplier16
Supplier17
Supplier18
Supplier20
Supplier19
Supplier21
Supplier22
Supplier23
Supplier24
Supplier25
Supplier26
Supplier27
Supplier35
Supplier33
Supplier34
Supplier32
Supplier30
Supplier29
Supplier31
Supplier28
Supplier36
Client China Vietnam Bangladesh IndiaTurkey
UnitpriceinUSD
Flex Fit hat - DDP Price comparation
FOB price DDP price (20' GP Loading) RFI Score
17
Recommended for audit and sampling
China IndiaBangladeshVietnamClient Turkey
7 Recommended for audit and sampling with 6% ~ 19% savings, 5 K to 16 K USD.
© 2015 Dragon Sourcing. All rights reserved.
4. Quotation Analysis – Flex Fit Hat
18
Note: Suppliers with no score are the ones who didn't respond to RFI.
Loading quantity in 20’GP 6,400
Loading quantity in 40’GP 14,400
Material: Raffia Straw
# Supplier name
RFI
Score
FOB price
(in USD)
Country of
Origin
Ocean freight
(USD/container)
Insurance
(USD/pc)
CIF Price
(USD/pc)
Import
Duty
(USD/pc)
local charges
estimate
(USD /
Container)
DDP Price
(USD/pc)
DDP mark up %
based on FOB
Saving %
Saving Value in
USD
20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP
Client Current Paid Price 2.92
1 Supplier 1 $2.76 China 3,560 4,320 0.02 0.02 3.33 3.08 0 655 705 3.44 3.13 24% 13%
2 Supplier 2 47 $2.81 China 3,560 4,320 0.02 0.02 3.38 3.13 0 655 705 3.49 3.18 24% 13%
3 Supplier 3 70 $3.00 China 3,560 4,320 0.02 0.02 3.58 3.32 0 655 705 3.68 3.37 23% 12%
4 Supplier 4 47 $3.00 China 3,560 4,320 0.02 0.02 3.58 3.32 0 655 705 3.68 3.37 23% 12%
5 Supplier 5 $3.45 China 3,560 4,320 0.02 0.02 4.03 3.77 0 655 705 4.13 3.82 20% 11%
6 Supplier 6 78 $3.56 China 3,560 4,320 0.02 0.02 4.14 3.88 0 655 705 4.24 3.93 19% 10%
7 Supplier 7 $3.60 China 3,560 4,320 0.02 0.02 4.18 3.92 0 655 705 4.28 3.97 19% 10%
8 Supplier 8 81 $3.70 China 3,560 4,320 0.02 0.02 4.28 4.02 0 655 705 4.38 4.07 18% 10%
9 Supplier 9 81 $3.78 China 3,560 4,320 0.02 0.02 4.36 4.10 0 655 705 4.46 4.15 18% 10%
10 Supplier 10 $3.90 China 3,560 4,320 0.02 0.02 4.48 4.22 0 655 705 4.58 4.27 17% 10%
11 Supplier 11 $4.10 China 3,560 4,320 0.02 0.02 4.68 4.42 0 655 705 4.78 4.47 17% 9%
12 Supplier 12 $4.17 China 3,560 4,320 0.02 0.02 4.75 4.49 0 655 705 4.85 4.54 16% 9%
13 Supplier 13 49 $2.75 Bangladesh 3,700 4,600 0.02 0.02 3.35 3.09 0 655 705 3.45 3.13 25% 14%
14 Supplier 14 50 $4.15 Bangladesh 3,700 4,600 0.02 0.02 4.75 4.49 0 655 705 4.86 4.54 17% 9%
Material: Paper Straw
# Supplier name
RFI
Score
FOB price
(in USD)
Country of
Origin
Ocean freight
(USD/container)
Insurance
(USD/pc)
CIF Price
(USD/pc)
Import
Duty
(USD/pc)
local charges
estimate
(USD /
Container)
DDP Price
(USD/pc)
DDP mark up %
based on FOB
Saving %
Saving Value in
USD
20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP
Client Current Paid Price 2.92
1 Supplier 1 $1.44 China
3,560 4,320
0.01 0.01 2.01 1.75
0 655 705
2.11 1.80 46% 25% 28% 39% 122,230 168,878
2 Supplier 4 47 $1.85 China 0.01 0.01 2.42 2.16 2.52 2.21 36% 19% 14% 24% 60,405 107,053
3 Supplier 3 70 $2.00 China 0.01 0.01 2.57 2.31 2.67 2.36 34% 18% 9% 19% 37,786 84,435
4 Supplier 6 78 $2.05 China 0.01 0.01 2.62 2.36 2.72 2.41 33% 18% 7% 18% 30,247 76,895
5 Supplier 8 81 $2.10 China 0.01 0.01 2.67 2.41 2.77 2.46 32% 17% 5% 16% 22,707 69,355
6 Supplier 2 47 $2.34 China 0.02 0.01 2.91 2.65 3.01 2.70 29% 16% 8% 33,165
7 Supplier 12 $2.38 China 0.02 0.01 2.95 2.69 3.05 2.74 28% 15% 6% 27,134
8 Supplier 9 81 $3.08 China 0.02 0.02 3.66 3.40 3.76 3.45 22% 12%
© 2015 Dragon Sourcing. All rights reserved.
4. Quotation Analysis – Cowboy Hat
1.44
1.85 2.00 2.05 2.10
2.34 2.38
3.08
2.76 2.81
3.00 3.00
3.45 3.56 3.60 3.70 3.78 3.90
4.10 4.17
2.75
4.15
2.92
1.80
2.21 2.36 2.41 2.46
2.70 2.74
3.45
3.13 3.18
3.37 3.37
3.82 3.93 3.97 4.07 4.15 4.27
4.47 4.54
3.13
4.5447
70
78 81
47
81
47
70
47
78 81 81
49 50
(45)
100
$0.00
$2.00
$4.00
$6.00
$8.00
Currentpaidprice
Supplier1
Supplier4
Supplier3
Supplier6
Supplier8
Supplier2
Supplier12
Supplier9
Supplier1
Supplier2
Supplier3
Supplier4
Supplier5
Supplier6
Supplier7
Supplier8
Supplier9
Supplier10
Supplier11
Supplier12
Supplier13
Supplier14
Paper Straw Raffia Straw Raffia Straw
Client China Bangladesh
UnitpriceinUSD
Cowboy hat - DDP Price comparation
FOB price DDP price (40' GP Loading) RFI Score
19
China
Raffia Straw
Bangladesh
Paper Straw
Client
© 2015 Dragon Sourcing. All rights reserved.
4. Quotation Analysis – Cowboy Hat
1. Introduction
2. Category Demand Analysis
3. Supply Base Response
4. Quotation Analysis
5. Supplier Recommendation
20
Agenda
© 2015 Dragon Sourcing. All rights reserved.
92
75 74
70 70
67 67 65
50
42
66
61
50
61
50 49
58
19
0
10
20
30
40
50
60
70
80
90
100
Supplier1
Supplier2
Supplier3
Supplier4
Supplier5
Supplier7
Supplier6
Supplier9
Supplier15
Supplier17
Supplier8
Supplier10
Supplier14
Supplier11
Supplier13
Supplier16
Supplier12
Supplier18
China Vietnam Bangladesh Turkey India
RFIScore
Flex Fit Hat - Supplier RFI Scorecard summary
Company Background Cooperation Willingness RFQ Completeness Production Capability Quality Control Management & Certifications
21
5. RFI Scorecard and Ranking Summary
Recommended for audit and sampling
© 2015 Dragon Sourcing. All rights reserved.
© 2015 Dragon Sourcing. All rights reserved.. 22
5. Supplier Recommendation
No. Country Of Origin Supplier name RFI Score
Potential
Saving In USD
Reason for recommending
1 China Supplier 4 70 16,051
• Competitive price. Have quoted 2 item,2 item with potential saving.
• Highest Total saving value 16 K USD among all suppliers.
• 23 years production experience in the industry, Produced the similar Hats before.
• Over 30% export to EU & US, with 23 years of export experience.
2 China Supplier 5 70 14,794
• Competitive price. Have quoted 1 item,1 item with potential saving.
• Total saving value 15 K USD among all suppliers.
• 9 years production experience in the industry, Produced the similar Hats before.
• Over 47% export to EU & US, with 9 years of export experience.
3 China Supplier 1 92 7,255
• Competitive price. Have quoted 1 item,1 item with potential saving.
• Total saving value 7 K USD among all suppliers.
• 17 years production experience in the industry, Produced the similar Hats before.
• Over 30% export to EU & US, with 10 years of export experience.
• All production steps are in house.
4 China Supplier 2 75 6.501
• Competitive price. Have quoted 1 item,1 item with potential saving.
• Total saving value 6.5 K USD among all suppliers.
• 17 years production experience in the industry, Produced the similar Hats before.
• Over 35% export to EU & US, with 11 years of export experience.
• All production steps are in house.
5 China Supplier 9 65 4,993
• Have quoted 1 item,1 item with potential saving.
• Total saving value 5 K USD among all suppliers.
• 10 years production experience in the industry, Produced the similar Hats before.
• Over 30% export to EU & US, with 10 years of export experience.
6 China Supplier 6 67 4.741
• Have quoted 1 item,1 item with potential saving.
• Total saving value 5 K USD among all suppliers.
• 11 years production experience in the industry, Produced the similar Hats before.
• Over 50% export to EU & US, with 11 years of export experience.
7 Bangladesh Supplier 13 50 5,888
• Have quoted 2 item,1 item with potential saving.
• Total saving value 6 K USD among all suppliers.
• 14 years production experience in the industry, Produced the similar Hats before.
• 14 years of export experience.
• Sedex, Oeko-Tex, BSCI, Certificate
© 2015 Dragon Sourcing. All rights reserved. 23
Company Name: Supplier 1
Company Background
RFI/RFQ rank: 1
Score: 92
COMPANY BACKGROUND
Year Founded 1998
Ownership
(State Owned/ Private/ Foreign Invested)
Private
Business Type: Manufacturer, or trader ? Manufacturer
Registered Capital (in US$) 100,000
Export License ? (Y/N) No
Able to export to EU or Canada ? (Y/N) Yes
Export Experience (in Years) 10
Work Floor Size ( Square meters) 2,500
Total Employee Number 380
No. of English speaker and writer 5
Main products
baseball caps, snapback hats,sports caps,
sunbonnets, bucket hat, kid caps
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
Declare able to comply with Molson Coors supplier standard (Social compliance). (Y/N) Yes
HUMAN RESOURCES
Factory Workers
Quality Control
staff
Mold designer
Sample making
staff
Sales &
Management and
Other staff
Employee No. 330 10 5 5 25
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
2015 Forecast 2014 2013
Total Sales Turnover (in M USD) 3.8 M 2 M 2.7 M
MAIN MARKET
Europe (%) Canada (%) US (%) Asia (%)
Rest of the world
(%)
% of Sales 25 5 10 55 5
TOP 3 CUSTOMER
Customer Name Industry Country % of Sales Type of Product
Top 3
Customers
Ayazkurbanov Russia 15 baseball cap
Dirk US 11 snapback hat
Binta Asia 10 baseball cap
© 2015 Dragon Sourcing. All rights reserved. 24
Company Name: Supplier 1
Production Capability & Design Capability
PRODUCTION CAPABILITY
Annual
Qty.
Able to
Produce
(Y/N)
Manufacturer
In-house or
outsourcing?
Production
experience
(years)
Monthly
Production
Capacity
(Pcs / Month)
Actual annual
production in
2014
(Pcs / year)
Briefly specify the production process
All production
steps are
In-house?
(Y/N)
Which production steps
are outsourcing?
Order / production
lead time (in weeks)
T-shirt Man / Woman
Polo Shirt Man /
Woman
Shirt Man / Woman
Apron
Table Cloth
Beach Towel
Flex Fit Hat Yes In-house 16 500,000 7,000,000 Die cutting Yes embroidery/printing
Cowboy Hat
DESIGN CAPABILITY & PRODUCTION CUT OFF PERIOD
Have design capability in-house, able to propose a design based on client brief. (Y/N) Yes
Have prototyping / sample production capability in-house (Y/N) Yes
Production cut off period for Chinese New Year. (From which date to which date) One week before new year and one week after the new year
Order cut-off date for order to be shipped before Chinese new year. (Date) 1 month before the new year
RFI/RFQ rank: 1
Score: 92
© 2015 Dragon Sourcing. All rights reserved. 25
Company Name: Supplier 1
Production Equipment & Quality Control Management
PRODUCTION EQUIPMENT
Equipment name Quantity Brand / Type
Usage of the
Equipment
CERTIFICATIONS
Certificate Y/N
Date of
Certificate
Date of
Expire
Certificate
number.
Certifying
Organization
ISO 9001:2008
Quality management systems
Yes
ISO 14001
Environmental management systems
SA 8000
Euro 1 Certificate
QUALITY CONTROL MANAGEMENT
Able to comply AQL Standard: Critical 0, Major 1.0, Minor 2.5 (Y/N) Yes
Able to comply AQL Standard: Critical 0, Major 2.5, Minor 4.0 (Y/N) Yes
General Production Defective Rate (% rejected)? 0.13
Time to keep QC records? (in Month) 120
Accept 3rd party QC? (Y/N) Yes
Have product recall system in place (Y/N) Yes
Customer Satisfaction Survey in place (Y/N) Yes
Internal rule regarding maximum reaction time of quality claim (hours) 72 h
PRODUCT CERTIFICATIONS
Product Certificate Y/N
Date of
Certificate
Date of
Expire
Certificate
number.
Certifying
Organization
RFI/RFQ rank: 1
Score: 92
© 2015 Dragon Sourcing. All rights reserved. 26
Company Name: Supplier 1
Photos
FACTORY PHOTOS
Factory Overview Office Warehouse
Workshop Workshop Machinery
Machinery Machinery Showroom
RFI/RFQ rank: 1
Score: 92

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Hat Sourcing Case Study Analysis

  • 1. Dragon Sourcing Your Tailored Sourcing Approach to Emerging Markets Hat Sourcing - Case Study 27th Aug, 2015 Lynn Fan Tel: +86 21 61413965 Mob: +86 (0) 15900898910 Email: Lynn.fan@dragonsourcing.com 1 © 2015 Dragon Sourcing. All rights reserved.
  • 2. 1. Introduction 2. Category Demand Analysis 3. Supply Base Response 4. Quotation Analysis 5. Supplier Recommendation 2 Agenda © 2015 Dragon Sourcing. All rights reserved.
  • 3. 3 1. Objectives & Scope Objectives Objectives was to secure savings through consolidating procurement and sourcing direct from manufacturers in emerging markets Geographies included: China, Vietnam, India, Bangladesh, Turkey © 2015 Dragon Sourcing. All rights reserved.
  • 4. 4 1. 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 © 2015 Dragon Sourcing. All rights reserved.
  • 5. 5 1. 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 Client buyers, of all the suppliers. Focus is management, logistics, production & quality.  Completed Audit Questionnaires 9. Analyze 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 Client.  Contract(s) Milestone 4: Contracts Secured Phase 2: Selection & Contracting © 2015 Dragon Sourcing. All rights reserved.
  • 6. Phase 1: Supplier Pre-qualification Steps Duration/week commencing Week 1 June 8 ~ 12 Week 2 June 15 ~ 19 Week 3 June 22 ~ 26 Week 4 June 29 ~ July 3 Week 5 July 6 ~ 10 Week 6 July 13 ~ 17 Week 7 July 20 ~ 24 Week 8 July 27 ~ 31 Phase1 1. Demand Analysis 1 2. Supply Market Analysis 2 3. Telephone pre-screening 1 4. Develop RFI/RFQ 1 5. Administer RFI/RFQ 4 6. Analyze RFI/RFQ Responses 2 1. Schedule Not started Done In process Delay Phase 1 (Supplier pre-qualification): 8 weeks 1 RFI/RFQ Approved Shortlist for Audit Agreed 2 6© 2015 Dragon Sourcing. All rights reserved.
  • 7. 1. Introduction 2. Category Demand Analysis 3. Supply Base Response 4. Quotation Analysis 5. Supplier Recommendation 7 Agenda © 2015 Dragon Sourcing. All rights reserved.
  • 8. © 2015 Dragon Sourcing. All rights reserved. Category: Hats Product Specification Product description Flex fit hat Cowboy hat Material Flex Fit Hat: 97% Cotton & 3% Spandex for Flex fit hats Cowboy hat: Raffia Straw & Paper Straw for Cowboy hats Packing & Packaging Information Packaging Description: 24 pcs per polybag for Flex fit hats 50 units per sleeve, 150 units per carton for Cowboy hats Number of pieces in a 20'container 32,000 pcs for Flex fit hats 6,400 pcs for Cowboy hats Number of pieces in a 40'container 72,000 pcs for Flex fit hats 14,400 pcs for Cowboy hats Product Picture Flex Fit Hat Cowboy Hat
  • 9. 1. Introduction 2. Category Demand Analysis 3. Supply Base Response 4. Quotation Analysis 5. Supplier Recommendation 9 Agenda © 2015 Dragon Sourcing. All rights reserved.
  • 10. 105 73 40 31 6 41 17 6 1 35 14 6 3 1 30 24 8 4 20 6 2 1 0 50 100 150 200 250 No. of suppliers identified and called No. of suppliers passed phone screening & included in RFI/RFQ process No. of suppliers intend to respond No. of RFI/RFQ responses received No. of suppliers recommended for audit and sampling #ofsupplier China India Bangladesh Vietnam Turkey Progress review chart – Hats 231 10 134 62 40 7 © 2015 Dragon Sourcing. All rights reserved. 3. Supply Base Response 231 suppliers in 5 countries were identified leading to 7 suppliers recommended for audit and sampling.
  • 11. 11 20 62 © 2015 Dragon Sourcing. All rights reserved. 3. Supplier Geographic Distribution
  • 12. Phone Screening - Failed reason No. of suppliers % China India Bangladesh Vietnam Turkey Not reachable, called many times, but no one answer the phone. 34 54% 14 1 15 1 3 Used to produce hats, but don't produce it any more. 23 37% 13 8 1 1 Doesn't export / Can't export, or only focus on domestic market 19 30% 11 1 1 6 Traders only, not a manufacturer. 8 13% 3 1 1 3 Duplicated supplier 5 8% 1 3 1 Stopped the business: Bankrupted, cease the operation or production…etc. 5 8% 3 1 1 Not interested in the project 2 3% 1 1 Only work for their mother company 1 2% 1 97 32 24 21 6 14 3. Phone Screening Rejection Reason Analysis 12 Phone screening - Rejection reason analysis 54% 37% 30% 13% 8% 8% 3% 2% © 2015 Dragon Sourcing. All rights reserved.
  • 13. RFI/RFQ - Failed reason No. of suppliers % China India Bangladesh Vietnam Turkey Promised to respond, but didn't respond before due date.(Some supplier need more time to respond.) 22 25% 9 5 3 4 1 Not interested in participating the selection process after reviewing the RFI/RFQ template. 17 18% 7 5 2 2 1 Too busy to reply or can't respond on time 10 10% 5 2 2 1 Can't reach supplier to follow up the RFI/RFQ completion status 8 8% 2 2 2 2 Not willing to proceed as they don't think their price will be competitive. 8 8% 8 Not willing to give company information (e.g. capacity, machine park, profit, ) through RFI at this stage. 7 7% 7 Can't find requested material in Vietnam for cowboy hat. 5 5% 5 Can't meet specification. 5 5% 2 1 2 They don't think they can meet the quality standard, need samples to check. 3 3% 3 Informed DS they cannot export directly or via agent after checking the RFQ. 2 2% 2 Have no production capacity free at the moment, engaged with current load, not able to respond to more orders. 2 2% 1 1 Unable to communicate in English, no English speaker 2 2% 2 Can't meet the function requirement: do not fade during the first 25 times of washing. 1 1% 1 Supplier think they can’t meet Molson Coors social compliance requirement. 1 1% 1 Supplier MOQ is the 20,000 pcs for one shipment. 1 1% 1 94 42 16 11 20 5 3. RFI/RFQ Rejection Reason Analysis 13 RFI/RFQ - Rejection reason analysis 25% 18% 10%8% 8% 7% 5% 5% 3% 2% 2% 2% 1% 1% 1% © 2015 Dragon Sourcing. All rights reserved.
  • 14. 1. Introduction 2. Category Demand Analysis 3. Supply Base Response 4. Quotation Analysis 5. Supplier Recommendation 14 Agenda © 2015 Dragon Sourcing. All rights reserved.
  • 15. 15 4. Quotation Analysis FOB Price (supplier) Freight forwarding, customs & duties DDP Price + Cargo Marine Insurance FOB Price Sea Freight + + Import Duty Local charges + Inland Truck Transportation cost + DDP Price= + 1) Sea Freight: (Sea Freight cost received from DS forwarder on July 22nd, 2015, valid until July 31st 2015) 2) Local charges and Inland truck transportation cost: (Received from DS forwarder on July 22nd, 2015, valid until July 31st 2015) 3) Import duty rate was searched in different government websites: © 2015 Dragon Sourcing. All rights reserved.
  • 16. 16 Recommended for audit and sampling Note: Suppliers with no score are the ones who didn't respond to RFI. Loading quantity in 20’GP 32,000 Loading quantity in 40’GP 72,000 # Suppleir name RFI Score FOB price (in USD) Country of Origin Ocean freight (USD/container) Insurance (USD/pc) CIF Price (USD/pc) Import Duty (USD/pc) local charges estimate (USD / Container) DDP Price (USD/pc) DDP mark up % based on FOB Saving % Saving Value in USD 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP Client Current Paid Price 2.08 1 Supplier 1 $1.05 China 3,560 4,320 0.006 0.006 1.167 1.116 0 655 705 1.19 1.13 13% 7% 43% 46% 22,334 23,889 2 Supplier 2 $1.20 China 0.007 0.007 1.318 1.267 1.34 1.28 12% 6% 36% 39% 18,564 20,119 3 Supplier 3 70 $1.30 China 0.007 0.007 1.419 1.367 1.44 1.38 11% 6% 31% 34% 16,051 17,606 4 Supplier 4 42 $1.34 China 0.008 0.007 1.459 1.407 1.48 1.42 10% 6% 29% 32% 15,045 16,600 5 Supplier 5 70 $1.35 China 0.008 0.007 1.469 1.417 1.49 1.43 10% 6% 28% 31% 14,794 16,349 6 Supplier 6 $1.39 China 0.008 0.008 1.509 1.458 1.53 1.47 10% 6% 27% 29% 13,789 15,344 7 Supplier 7 $1.47 China 0.008 0.008 1.590 1.538 1.61 1.55 10% 5% 23% 26% 11,778 13,333 8 Supplier 8 $1.50 China 0.009 0.008 1.620 1.568 1.64 1.58 9% 5% 21% 24% 11,024 12,579 9 Supplier 9 $1.55 China 0.009 0.009 1.670 1.619 1.69 1.63 9% 5% 19% 22% 9,768 11,323 10 Supplier 10 $1.64 China 0.009 0.009 1.760 1.709 1.78 1.72 9% 5% 14% 17% 7,506 9,061 11 Supplier 11 92 $1.65 China 0.009 0.009 1.771 1.719 1.79 1.73 9% 5% 14% 17% 7,255 8,809 12 Supplier 12 $1.66 China 0.009 0.009 1.781 1.729 1.80 1.74 8% 5% 13% 16% 7,003 8,558 13 Supplier 13 75 $1.68 China 0.009 0.009 1.801 1.749 1.82 1.76 8% 5% 12% 15% 6,501 8,056 14 Supplier 14 $1.68 China 0.009 0.009 1.801 1.749 1.82 1.76 8% 5% 12% 15% 6,501 8,056 15 Supplier 15 65 $1.74 China 0.010 0.010 1.861 1.810 1.88 1.82 8% 5% 10% 13% 4,993 6,548 16 Supplier 16 67 $1.75 China 0.010 0.010 1.871 1.820 1.89 1.83 8% 5% 9% 12% 4,741 6,296 17 Supplier 17 $1.79 China 0.010 0.010 1.911 1.860 1.93 1.87 8% 4% 7% 10% 3,736 5,291 18 Supplier 18 $1.80 China 0.010 0.010 1.921 1.870 1.94 1.88 8% 4% 7% 10% 3,485 5,040 19 Supplier 19 $1.85 China 0.010 0.010 1.972 1.920 1.99 1.93 8% 4% 4% 7% 2,228 3,783 20 Supplier 20 $1.85 China 0.010 0.010 1.972 1.920 1.99 1.93 8% 4% 4% 7% 2,228 3,783 21 Supplier 21 50 $1.93 China 0.011 0.011 2.052 2.001 2.07 2.01 7% 4% 3% 218 1,773 22 Supplier 22 $1.95 China 0.011 0.011 2.072 2.021 2.09 2.03 7% 4% 2% 1,270 23 Supplier 23 67 $2.00 China 0.011 0.011 2.122 2.071 2.14 2.08 7% 4% 13 24 Supplier 24 74 $2.00 China 0.011 0.011 2.122 2.071 2.14 2.08 7% 4% 13 25 Supplier 25 $2.26 China 0.013 0.012 2.384 2.332 2.40 2.34 6% 4% 26 Supplier 26 $2.35 China 0.013 0.013 2.474 2.423 2.49 2.43 6% 4% 27 Supplier 27 $2.50 China 0.014 0.014 2.625 2.574 2.65 2.58 6% 3% 28 Supplier 28 19 $2.00 India 3,130 4,250 0.011 0.011 2.109 2.070 2.13 2.08 6% 4% 38 29 Supplier 29 49 $2.50 Bangladesh 3,700 4,600 0.014 0.014 2.629 2.577 2.65 2.59 6% 3% 30 Supplier 30 50 $1.70 Bangladesh 0.010 0.009 1.825 1.773 1.85 1.78 9% 5% 11% 14% 5,888 7,455 31 Supplier 31 61 $3.50 Bangladesh 0.019 0.019 3.635 3.583 3.66 3.59 4% 3% 32 Supplier 32 50 $2.65 Vietnam 3,200 3,600 0.015 0.014 2.765 2.714 2.78 2.72 5% 3% 33 Supplier 33 66 $1.83 Vietnam 0.010 0.010 1.940 1.890 1.96 1.90 7% 4% 6% 9% 3,014 4,537 34 Supplier 34 61 $1.90 Vietnam 0.011 0.010 2.011 1.960 2.03 1.97 7% 4% 2% 5% 1,254 2,778 35 Supplier 35 $1.58 Vietnam 0.009 0.009 1.689 1.639 1.71 1.65 8% 4% 18% 21% 9,297 10,820 36 Supplier 36 $3.05 Turkey 2,850 3,600 0.017 0.016 3.156 3.116 3.18 3.13 4% 2% © 2015 Dragon Sourcing. All rights reserved. 4. Quotation Analysis – Flex Fit Hat
  • 17. 2.08 1.19 1.34 1.44 1.48 1.49 1.53 1.61 1.64 1.69 1.78 1.79 1.80 1.82 1.82 1.88 1.89 1.93 1.94 1.99 1.99 2.07 2.09 2.14 2.14 2.40 2.49 2.65 1.71 1.96 2.03 2.78 1.85 2.65 3.66 2.13 3.18 70 42 70 92 75 65 67 50 67 74 66 61 50 50 49 61 19 (400) (300) (200) (100) 0 100 $0.00 $1.00 $2.00 $3.00 $4.00 Currentpaidprice Supplier1 Supplier2 Supplier3 Supplier4 Supplier5 Supplier6 Supplier7 Supplier8 Supplier9 Supplier10 Supplier11 Supplier12 Supplier14 Supplier13 Supplier15 Supplier16 Supplier17 Supplier18 Supplier20 Supplier19 Supplier21 Supplier22 Supplier23 Supplier24 Supplier25 Supplier26 Supplier27 Supplier35 Supplier33 Supplier34 Supplier32 Supplier30 Supplier29 Supplier31 Supplier28 Supplier36 Client China Vietnam Bangladesh IndiaTurkey UnitpriceinUSD Flex Fit hat - DDP Price comparation FOB price DDP price (20' GP Loading) RFI Score 17 Recommended for audit and sampling China IndiaBangladeshVietnamClient Turkey 7 Recommended for audit and sampling with 6% ~ 19% savings, 5 K to 16 K USD. © 2015 Dragon Sourcing. All rights reserved. 4. Quotation Analysis – Flex Fit Hat
  • 18. 18 Note: Suppliers with no score are the ones who didn't respond to RFI. Loading quantity in 20’GP 6,400 Loading quantity in 40’GP 14,400 Material: Raffia Straw # Supplier name RFI Score FOB price (in USD) Country of Origin Ocean freight (USD/container) Insurance (USD/pc) CIF Price (USD/pc) Import Duty (USD/pc) local charges estimate (USD / Container) DDP Price (USD/pc) DDP mark up % based on FOB Saving % Saving Value in USD 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP Client Current Paid Price 2.92 1 Supplier 1 $2.76 China 3,560 4,320 0.02 0.02 3.33 3.08 0 655 705 3.44 3.13 24% 13% 2 Supplier 2 47 $2.81 China 3,560 4,320 0.02 0.02 3.38 3.13 0 655 705 3.49 3.18 24% 13% 3 Supplier 3 70 $3.00 China 3,560 4,320 0.02 0.02 3.58 3.32 0 655 705 3.68 3.37 23% 12% 4 Supplier 4 47 $3.00 China 3,560 4,320 0.02 0.02 3.58 3.32 0 655 705 3.68 3.37 23% 12% 5 Supplier 5 $3.45 China 3,560 4,320 0.02 0.02 4.03 3.77 0 655 705 4.13 3.82 20% 11% 6 Supplier 6 78 $3.56 China 3,560 4,320 0.02 0.02 4.14 3.88 0 655 705 4.24 3.93 19% 10% 7 Supplier 7 $3.60 China 3,560 4,320 0.02 0.02 4.18 3.92 0 655 705 4.28 3.97 19% 10% 8 Supplier 8 81 $3.70 China 3,560 4,320 0.02 0.02 4.28 4.02 0 655 705 4.38 4.07 18% 10% 9 Supplier 9 81 $3.78 China 3,560 4,320 0.02 0.02 4.36 4.10 0 655 705 4.46 4.15 18% 10% 10 Supplier 10 $3.90 China 3,560 4,320 0.02 0.02 4.48 4.22 0 655 705 4.58 4.27 17% 10% 11 Supplier 11 $4.10 China 3,560 4,320 0.02 0.02 4.68 4.42 0 655 705 4.78 4.47 17% 9% 12 Supplier 12 $4.17 China 3,560 4,320 0.02 0.02 4.75 4.49 0 655 705 4.85 4.54 16% 9% 13 Supplier 13 49 $2.75 Bangladesh 3,700 4,600 0.02 0.02 3.35 3.09 0 655 705 3.45 3.13 25% 14% 14 Supplier 14 50 $4.15 Bangladesh 3,700 4,600 0.02 0.02 4.75 4.49 0 655 705 4.86 4.54 17% 9% Material: Paper Straw # Supplier name RFI Score FOB price (in USD) Country of Origin Ocean freight (USD/container) Insurance (USD/pc) CIF Price (USD/pc) Import Duty (USD/pc) local charges estimate (USD / Container) DDP Price (USD/pc) DDP mark up % based on FOB Saving % Saving Value in USD 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP 20' GP 40' GP Client Current Paid Price 2.92 1 Supplier 1 $1.44 China 3,560 4,320 0.01 0.01 2.01 1.75 0 655 705 2.11 1.80 46% 25% 28% 39% 122,230 168,878 2 Supplier 4 47 $1.85 China 0.01 0.01 2.42 2.16 2.52 2.21 36% 19% 14% 24% 60,405 107,053 3 Supplier 3 70 $2.00 China 0.01 0.01 2.57 2.31 2.67 2.36 34% 18% 9% 19% 37,786 84,435 4 Supplier 6 78 $2.05 China 0.01 0.01 2.62 2.36 2.72 2.41 33% 18% 7% 18% 30,247 76,895 5 Supplier 8 81 $2.10 China 0.01 0.01 2.67 2.41 2.77 2.46 32% 17% 5% 16% 22,707 69,355 6 Supplier 2 47 $2.34 China 0.02 0.01 2.91 2.65 3.01 2.70 29% 16% 8% 33,165 7 Supplier 12 $2.38 China 0.02 0.01 2.95 2.69 3.05 2.74 28% 15% 6% 27,134 8 Supplier 9 81 $3.08 China 0.02 0.02 3.66 3.40 3.76 3.45 22% 12% © 2015 Dragon Sourcing. All rights reserved. 4. Quotation Analysis – Cowboy Hat
  • 19. 1.44 1.85 2.00 2.05 2.10 2.34 2.38 3.08 2.76 2.81 3.00 3.00 3.45 3.56 3.60 3.70 3.78 3.90 4.10 4.17 2.75 4.15 2.92 1.80 2.21 2.36 2.41 2.46 2.70 2.74 3.45 3.13 3.18 3.37 3.37 3.82 3.93 3.97 4.07 4.15 4.27 4.47 4.54 3.13 4.5447 70 78 81 47 81 47 70 47 78 81 81 49 50 (45) 100 $0.00 $2.00 $4.00 $6.00 $8.00 Currentpaidprice Supplier1 Supplier4 Supplier3 Supplier6 Supplier8 Supplier2 Supplier12 Supplier9 Supplier1 Supplier2 Supplier3 Supplier4 Supplier5 Supplier6 Supplier7 Supplier8 Supplier9 Supplier10 Supplier11 Supplier12 Supplier13 Supplier14 Paper Straw Raffia Straw Raffia Straw Client China Bangladesh UnitpriceinUSD Cowboy hat - DDP Price comparation FOB price DDP price (40' GP Loading) RFI Score 19 China Raffia Straw Bangladesh Paper Straw Client © 2015 Dragon Sourcing. All rights reserved. 4. Quotation Analysis – Cowboy Hat
  • 20. 1. Introduction 2. Category Demand Analysis 3. Supply Base Response 4. Quotation Analysis 5. Supplier Recommendation 20 Agenda © 2015 Dragon Sourcing. All rights reserved.
  • 21. 92 75 74 70 70 67 67 65 50 42 66 61 50 61 50 49 58 19 0 10 20 30 40 50 60 70 80 90 100 Supplier1 Supplier2 Supplier3 Supplier4 Supplier5 Supplier7 Supplier6 Supplier9 Supplier15 Supplier17 Supplier8 Supplier10 Supplier14 Supplier11 Supplier13 Supplier16 Supplier12 Supplier18 China Vietnam Bangladesh Turkey India RFIScore Flex Fit Hat - Supplier RFI Scorecard summary Company Background Cooperation Willingness RFQ Completeness Production Capability Quality Control Management & Certifications 21 5. RFI Scorecard and Ranking Summary Recommended for audit and sampling © 2015 Dragon Sourcing. All rights reserved.
  • 22. © 2015 Dragon Sourcing. All rights reserved.. 22 5. Supplier Recommendation No. Country Of Origin Supplier name RFI Score Potential Saving In USD Reason for recommending 1 China Supplier 4 70 16,051 • Competitive price. Have quoted 2 item,2 item with potential saving. • Highest Total saving value 16 K USD among all suppliers. • 23 years production experience in the industry, Produced the similar Hats before. • Over 30% export to EU & US, with 23 years of export experience. 2 China Supplier 5 70 14,794 • Competitive price. Have quoted 1 item,1 item with potential saving. • Total saving value 15 K USD among all suppliers. • 9 years production experience in the industry, Produced the similar Hats before. • Over 47% export to EU & US, with 9 years of export experience. 3 China Supplier 1 92 7,255 • Competitive price. Have quoted 1 item,1 item with potential saving. • Total saving value 7 K USD among all suppliers. • 17 years production experience in the industry, Produced the similar Hats before. • Over 30% export to EU & US, with 10 years of export experience. • All production steps are in house. 4 China Supplier 2 75 6.501 • Competitive price. Have quoted 1 item,1 item with potential saving. • Total saving value 6.5 K USD among all suppliers. • 17 years production experience in the industry, Produced the similar Hats before. • Over 35% export to EU & US, with 11 years of export experience. • All production steps are in house. 5 China Supplier 9 65 4,993 • Have quoted 1 item,1 item with potential saving. • Total saving value 5 K USD among all suppliers. • 10 years production experience in the industry, Produced the similar Hats before. • Over 30% export to EU & US, with 10 years of export experience. 6 China Supplier 6 67 4.741 • Have quoted 1 item,1 item with potential saving. • Total saving value 5 K USD among all suppliers. • 11 years production experience in the industry, Produced the similar Hats before. • Over 50% export to EU & US, with 11 years of export experience. 7 Bangladesh Supplier 13 50 5,888 • Have quoted 2 item,1 item with potential saving. • Total saving value 6 K USD among all suppliers. • 14 years production experience in the industry, Produced the similar Hats before. • 14 years of export experience. • Sedex, Oeko-Tex, BSCI, Certificate
  • 23. © 2015 Dragon Sourcing. All rights reserved. 23 Company Name: Supplier 1 Company Background RFI/RFQ rank: 1 Score: 92 COMPANY BACKGROUND Year Founded 1998 Ownership (State Owned/ Private/ Foreign Invested) Private Business Type: Manufacturer, or trader ? Manufacturer Registered Capital (in US$) 100,000 Export License ? (Y/N) No Able to export to EU or Canada ? (Y/N) Yes Export Experience (in Years) 10 Work Floor Size ( Square meters) 2,500 Total Employee Number 380 No. of English speaker and writer 5 Main products baseball caps, snapback hats,sports caps, sunbonnets, bucket hat, kid caps 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 Declare able to comply with Molson Coors supplier standard (Social compliance). (Y/N) Yes HUMAN RESOURCES Factory Workers Quality Control staff Mold designer Sample making staff Sales & Management and Other staff Employee No. 330 10 5 5 25 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 2015 Forecast 2014 2013 Total Sales Turnover (in M USD) 3.8 M 2 M 2.7 M MAIN MARKET Europe (%) Canada (%) US (%) Asia (%) Rest of the world (%) % of Sales 25 5 10 55 5 TOP 3 CUSTOMER Customer Name Industry Country % of Sales Type of Product Top 3 Customers Ayazkurbanov Russia 15 baseball cap Dirk US 11 snapback hat Binta Asia 10 baseball cap
  • 24. © 2015 Dragon Sourcing. All rights reserved. 24 Company Name: Supplier 1 Production Capability & Design Capability PRODUCTION CAPABILITY Annual Qty. Able to Produce (Y/N) Manufacturer In-house or outsourcing? Production experience (years) Monthly Production Capacity (Pcs / Month) Actual annual production in 2014 (Pcs / year) Briefly specify the production process All production steps are In-house? (Y/N) Which production steps are outsourcing? Order / production lead time (in weeks) T-shirt Man / Woman Polo Shirt Man / Woman Shirt Man / Woman Apron Table Cloth Beach Towel Flex Fit Hat Yes In-house 16 500,000 7,000,000 Die cutting Yes embroidery/printing Cowboy Hat DESIGN CAPABILITY & PRODUCTION CUT OFF PERIOD Have design capability in-house, able to propose a design based on client brief. (Y/N) Yes Have prototyping / sample production capability in-house (Y/N) Yes Production cut off period for Chinese New Year. (From which date to which date) One week before new year and one week after the new year Order cut-off date for order to be shipped before Chinese new year. (Date) 1 month before the new year RFI/RFQ rank: 1 Score: 92
  • 25. © 2015 Dragon Sourcing. All rights reserved. 25 Company Name: Supplier 1 Production Equipment & Quality Control Management PRODUCTION EQUIPMENT Equipment name Quantity Brand / Type Usage of the Equipment CERTIFICATIONS Certificate Y/N Date of Certificate Date of Expire Certificate number. Certifying Organization ISO 9001:2008 Quality management systems Yes ISO 14001 Environmental management systems SA 8000 Euro 1 Certificate QUALITY CONTROL MANAGEMENT Able to comply AQL Standard: Critical 0, Major 1.0, Minor 2.5 (Y/N) Yes Able to comply AQL Standard: Critical 0, Major 2.5, Minor 4.0 (Y/N) Yes General Production Defective Rate (% rejected)? 0.13 Time to keep QC records? (in Month) 120 Accept 3rd party QC? (Y/N) Yes Have product recall system in place (Y/N) Yes Customer Satisfaction Survey in place (Y/N) Yes Internal rule regarding maximum reaction time of quality claim (hours) 72 h PRODUCT CERTIFICATIONS Product Certificate Y/N Date of Certificate Date of Expire Certificate number. Certifying Organization RFI/RFQ rank: 1 Score: 92
  • 26. © 2015 Dragon Sourcing. All rights reserved. 26 Company Name: Supplier 1 Photos FACTORY PHOTOS Factory Overview Office Warehouse Workshop Workshop Machinery Machinery Machinery Showroom RFI/RFQ rank: 1 Score: 92