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Dragon Sourcing - 龙 源
Delivering sustainable sourcing value from emerging markets
Strategic Sourcing Case Study – AIS, GIS, Transformer in substation
Jan 30th 2019
2
1. Objectives, Approach, and Schedule
2. Demand Analysis
3. Results
© 2019 Dragon Sourcing. All rights reserved.
Agenda
© 2019 Dragon Sourcing. All rights reserved.
Objectives and Approach
Context
• Objectives: Identify and recommend new potential competitive
suppliers.
• Geographical scope: China.
• Category: Sub Station Equipment
• Deliverables:
Stage 1
− Supplier database
− RFI-RFQ template
− RFI-RFQ analysis report
− Supplier profiles and ranking
Stage 2:
− Audit Report
− Contract(s)
3
Dragon Sourcing approach in 2 stages
Stage 1: Supplier Pre-Qualification
1. Demand Analysis
2. Supply Market Analysis
3. Telephone Pre-screening
4. Develop RFI/RFQ
5. Administer RFI/RFQ
6. Analyse RFI/RFQ Responses
Stage 2: Audits, Selection & Contracting
7. Prepare for audits
8. Conduct audits jointly with Sterlite Power
9. Analyse audit results
10.Negotiation & Contracting
Stage 1: Supplier Pre-Qualification
No. Steps Deliverables
1.
Demand Analysis
Work with Sterlite to define and understand the products and requirements (specs, volumes, current unit
prices, delivery destinations of delivery/consumption).
• Kick-Off Report
2.
Supply Market Analysis
Identify long list of potential manufacturers in China 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 a 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
Audit
© 2019 Dragon Sourcing. All rights reserved. 4
Stage 2: Audits, Selection & Contracting
No. Steps 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 manufacturers for their self-assessment followed by onsite
audits of all the manufacturers. Focus is management, logistics, production, quality and includes
photos & videos where allowed.
• 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
manufacturers, including a recommendation for those for sample development.
• Audit Report
• Supplier Audit Profiles
• Proposed Shortlist for
Sampling
10.
Negotiation & Contracting
Conducting final negotiations with the shortlisted manufacturers.
• Contract(s)
Milestone: Contracts Secured
• The time required to perform the audits will depend on how many suppliers need to be audited and their location.
© 2019 Dragon Sourcing. All rights reserved. 5
Milestones
Dragon Sourcing received 8 categories in parallel (1 GIS, 1 Transformer, 6 AIS)
Step Who W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
11/2 11/9 11/16 11/23 11/30 12/7 12/14 12/21 12/28 01/04 01/11 01/18 01/25 02/01
1. Demand Analysis Sterlite/ DS
2. Supply Market Analysis Sterlite/ DS
3. Telephone Pre-screening DS
4. Develop RFI/RFQ DS
5. Administer RFI/RFQ DS
6. Analyze RFI/RFQ Responses Sterlite/ DS
6© 2019 Dragon Sourcing. All rights reserved.
7
1. Objectives, Approach, and Schedule
2. Demand Analysis
3. Results
© 2019 Dragon Sourcing. All rights reserved.
Agenda
Number of categories
© 2019 Dragon Sourcing. All rights reserved. 8
Phase 1
# Category # of configuration
Volume
(Nos/Set/Bay)
1 CB 12 426
2 Isolator 26 681
3 Arrester 6 249
4 Insulator 13 762
5 CRP 53 1283
6 CT/VT/CVT 22 815
7 Transformer/Reactor 14 60
8 GIS 2 15
Product pictures
© 2019 Dragon Sourcing. All rights reserved. 9
Transformer GIS
CB Isolator Arrester
InsulatorCT CRP
10
1. Objectives, Approach, and Schedule
2. Demand Analysis
3. Results
© 2019 Dragon Sourcing. All rights reserved.
Agenda
© 2019 Dragon Sourcing. All rights reserved. 11
Total 101 suppliers identified, 46 passed pre-screening, 20 submitted RFI.
2 offered AIS, 3 offered GIS, 2 offered transformer, 1 offered both transformer and GIS.
Step Total
# of suppliers identified 101
# of suppliers passed pre-screening 46
# of suppliers failed pre-screening 55
# of RFIRFQ sent 46
# of suppliers reject to respond on RFI and RFQ 26
# of suppliers submit RFI but reject on RFQ 12
# of suppliers submit both RFI and RFQ 8
© 2019 Dragon Sourcing. All rights reserved. 12
12 potential suppliers located in 9 provinces (GIS and Transformer)
Xinjiang
Gansu
Jiangxi
Jiangsu
Guangxi
Hunan
Hubei
Qinghai
Ningxia
Shaanxi
Anhui
Zhejiang
Inner Mongolia
Shanxi
Xizang
Sichuan
Yunan
Guizhou
Henan
Jilin
Liaoning
Guangdong
Gansu
Shanghai
Hong Kong
Taiwan
Heilongjiang
Sichuan
Province
Fujian
Shandong
Hebei Tianjin
Beijing
# Supplier name Head office GIS Transformer Score
Offer received
or not?
1 xxx
Zhejiang
(Hangzhou)
95 Yes (GIS)
2 xxx
Henan
(Pingdingsha
n)
88 No
3 xxx
Liaoning
(Shenyang)
88 Yes (GIS)
4 xxx
Shanghai
(Shanghai)
87 /
5 xxx
Shandong
(Taian)
75 Yes (both)
6 xxx
Shandong
(Taian)
72 No
7 xxx
Henan
(Xuchang)
71 Yes (GIS)
8 xxx
Hunan
(Changsha)
70 No
9 xxx
Beijing
(Beijing)
67 No
10 xxx
Jiangsu
(Liyang)
64 No
11 xxx
Guangxi
(Liuzhou)
59
Yes
(Transformer)
12 xxx
Jiangsu
(Suzhou)
56
Yes
(Transformer)
RFI Analysis – 9 suppliers can offer GIS, with average score of ’79’
© 2019 Dragon Sourcing. All rights reserved. 13
GIS
95
88 88 87
75
72 71 70
67
0
25
50
75
100
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9
score
Overall Score
RFI Analysis
- assess 9 suppliers from 3 sections
© 2019 Dragon Sourcing. All rights reserved. 14
GIS
96
81 85
77 76 78
89
80 81
0
25
50
75
100
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9
score
Overall Business
90 85 90 85
55
100
45 40 40
0
25
50
75
100
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9
score
Project related capability
100 100
88
100 100
29
88
100
88
0
25
50
75
100
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9
score
Quality/Certificates
RFI Analysis- 8 suppliers can offer either AIS or Transformer, with average score of ’66’
© 2019 Dragon Sourcing. All rights reserved. 15
AIS + Transformer
74
69 68 68
65 63
60
58
0
25
50
75
100
supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8
score
Overall Score
RFI Analysis
- assess 8 suppliers from 3 sections
© 2019 Dragon Sourcing. All rights reserved. 16
AIS + Transformer
51 48
74 72
62
56
73
65
0
25
50
75
100
supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8
score
Overall Business
80
70
40
50
40
50
30 30
0
25
50
75
100
supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8
score
Project related capability
88 88
100
88
100
88 88 88
75
100
supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8
score
Quality/Certificates
Final Offer Summary – Transformer
- 3 suppliers provide quotation with datasheet.
© 2019 Dragon Sourcing. All rights reserved. 17
1 2 3 4 5 6 7 8 9 10 11 12
#
Supplier
name
500MVA,3Phase400/220/33KV
315MVA,3Phase400/132/33KV
315MVA,3Phase400/220/33KV
200MVA,3Phase220/132/33KV
160MVA,3Phase400/220/33KV
160MVA,3Phase220/132/11KV
160MVA,3Phase220/132/33KV
105MVA,1Phase400/132/33KV
105MVA,1Phase400/220/33KV
100MVA,3Phase132/33KV
80MVA,3Phase132/33KV
50MVA,3Phase132/33KV
1 Supplier 1 0.5 0.4 0.3
2 Supplier 2 2.3 1.8 1.0 1.4 0.8 0.9 0.7 0.5 0.5 0.4
3 Supplier 3 2.4 2.0 1.9 1.3 1.1 1.1 0.9 0.8 0.7 0.6 0.4
FOB price ( M USD)
Final Offer Summary – GIS
- 4 suppliers submitted offer with proposed drawings
© 2019 Dragon Sourcing. All rights reserved. 18
# Supplier name
FOB price - 220 KV GIS
(M USD)
1 Supplier 1 1.5
2 Supplier 2 1.6
3 Supplier 3 1.8
4 Supplier 4 1.8
Conclusions
✓ All the recommended suppliers are very well qualified (completed certificates, strong financial
background and global experience)
✓ All recommended suppliers are vertical integrated mails having all the production process in house
✓ 2 suppliers have been visited by Sterlite with very good impression. More meetings/visits will be
arranged in terms of RFI score.
✓ DS recommended suppliers are likely to become strategic partner of Sterlite.
15© 2019 Dragon Sourcing. All rights reserved.

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Substation Project Case Study by Dragon Sourcing

  • 1. Dragon Sourcing - 龙 源 Delivering sustainable sourcing value from emerging markets Strategic Sourcing Case Study – AIS, GIS, Transformer in substation Jan 30th 2019
  • 2. 2 1. Objectives, Approach, and Schedule 2. Demand Analysis 3. Results © 2019 Dragon Sourcing. All rights reserved. Agenda
  • 3. © 2019 Dragon Sourcing. All rights reserved. Objectives and Approach Context • Objectives: Identify and recommend new potential competitive suppliers. • Geographical scope: China. • Category: Sub Station Equipment • Deliverables: Stage 1 − Supplier database − RFI-RFQ template − RFI-RFQ analysis report − Supplier profiles and ranking Stage 2: − Audit Report − Contract(s) 3 Dragon Sourcing approach in 2 stages Stage 1: Supplier Pre-Qualification 1. Demand Analysis 2. Supply Market Analysis 3. Telephone Pre-screening 4. Develop RFI/RFQ 5. Administer RFI/RFQ 6. Analyse RFI/RFQ Responses Stage 2: Audits, Selection & Contracting 7. Prepare for audits 8. Conduct audits jointly with Sterlite Power 9. Analyse audit results 10.Negotiation & Contracting
  • 4. Stage 1: Supplier Pre-Qualification No. Steps Deliverables 1. Demand Analysis Work with Sterlite to define and understand the products and requirements (specs, volumes, current unit prices, delivery destinations of delivery/consumption). • Kick-Off Report 2. Supply Market Analysis Identify long list of potential manufacturers in China 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 a 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 Audit © 2019 Dragon Sourcing. All rights reserved. 4
  • 5. Stage 2: Audits, Selection & Contracting No. Steps 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 manufacturers for their self-assessment followed by onsite audits of all the manufacturers. Focus is management, logistics, production, quality and includes photos & videos where allowed. • 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 manufacturers, including a recommendation for those for sample development. • Audit Report • Supplier Audit Profiles • Proposed Shortlist for Sampling 10. Negotiation & Contracting Conducting final negotiations with the shortlisted manufacturers. • Contract(s) Milestone: Contracts Secured • The time required to perform the audits will depend on how many suppliers need to be audited and their location. © 2019 Dragon Sourcing. All rights reserved. 5
  • 6. Milestones Dragon Sourcing received 8 categories in parallel (1 GIS, 1 Transformer, 6 AIS) Step Who W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14 11/2 11/9 11/16 11/23 11/30 12/7 12/14 12/21 12/28 01/04 01/11 01/18 01/25 02/01 1. Demand Analysis Sterlite/ DS 2. Supply Market Analysis Sterlite/ DS 3. Telephone Pre-screening DS 4. Develop RFI/RFQ DS 5. Administer RFI/RFQ DS 6. Analyze RFI/RFQ Responses Sterlite/ DS 6© 2019 Dragon Sourcing. All rights reserved.
  • 7. 7 1. Objectives, Approach, and Schedule 2. Demand Analysis 3. Results © 2019 Dragon Sourcing. All rights reserved. Agenda
  • 8. Number of categories © 2019 Dragon Sourcing. All rights reserved. 8 Phase 1 # Category # of configuration Volume (Nos/Set/Bay) 1 CB 12 426 2 Isolator 26 681 3 Arrester 6 249 4 Insulator 13 762 5 CRP 53 1283 6 CT/VT/CVT 22 815 7 Transformer/Reactor 14 60 8 GIS 2 15
  • 9. Product pictures © 2019 Dragon Sourcing. All rights reserved. 9 Transformer GIS CB Isolator Arrester InsulatorCT CRP
  • 10. 10 1. Objectives, Approach, and Schedule 2. Demand Analysis 3. Results © 2019 Dragon Sourcing. All rights reserved. Agenda
  • 11. © 2019 Dragon Sourcing. All rights reserved. 11 Total 101 suppliers identified, 46 passed pre-screening, 20 submitted RFI. 2 offered AIS, 3 offered GIS, 2 offered transformer, 1 offered both transformer and GIS. Step Total # of suppliers identified 101 # of suppliers passed pre-screening 46 # of suppliers failed pre-screening 55 # of RFIRFQ sent 46 # of suppliers reject to respond on RFI and RFQ 26 # of suppliers submit RFI but reject on RFQ 12 # of suppliers submit both RFI and RFQ 8
  • 12. © 2019 Dragon Sourcing. All rights reserved. 12 12 potential suppliers located in 9 provinces (GIS and Transformer) Xinjiang Gansu Jiangxi Jiangsu Guangxi Hunan Hubei Qinghai Ningxia Shaanxi Anhui Zhejiang Inner Mongolia Shanxi Xizang Sichuan Yunan Guizhou Henan Jilin Liaoning Guangdong Gansu Shanghai Hong Kong Taiwan Heilongjiang Sichuan Province Fujian Shandong Hebei Tianjin Beijing # Supplier name Head office GIS Transformer Score Offer received or not? 1 xxx Zhejiang (Hangzhou) 95 Yes (GIS) 2 xxx Henan (Pingdingsha n) 88 No 3 xxx Liaoning (Shenyang) 88 Yes (GIS) 4 xxx Shanghai (Shanghai) 87 / 5 xxx Shandong (Taian) 75 Yes (both) 6 xxx Shandong (Taian) 72 No 7 xxx Henan (Xuchang) 71 Yes (GIS) 8 xxx Hunan (Changsha) 70 No 9 xxx Beijing (Beijing) 67 No 10 xxx Jiangsu (Liyang) 64 No 11 xxx Guangxi (Liuzhou) 59 Yes (Transformer) 12 xxx Jiangsu (Suzhou) 56 Yes (Transformer)
  • 13. RFI Analysis – 9 suppliers can offer GIS, with average score of ’79’ © 2019 Dragon Sourcing. All rights reserved. 13 GIS 95 88 88 87 75 72 71 70 67 0 25 50 75 100 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 score Overall Score
  • 14. RFI Analysis - assess 9 suppliers from 3 sections © 2019 Dragon Sourcing. All rights reserved. 14 GIS 96 81 85 77 76 78 89 80 81 0 25 50 75 100 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 score Overall Business 90 85 90 85 55 100 45 40 40 0 25 50 75 100 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 score Project related capability 100 100 88 100 100 29 88 100 88 0 25 50 75 100 Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 score Quality/Certificates
  • 15. RFI Analysis- 8 suppliers can offer either AIS or Transformer, with average score of ’66’ © 2019 Dragon Sourcing. All rights reserved. 15 AIS + Transformer 74 69 68 68 65 63 60 58 0 25 50 75 100 supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8 score Overall Score
  • 16. RFI Analysis - assess 8 suppliers from 3 sections © 2019 Dragon Sourcing. All rights reserved. 16 AIS + Transformer 51 48 74 72 62 56 73 65 0 25 50 75 100 supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8 score Overall Business 80 70 40 50 40 50 30 30 0 25 50 75 100 supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8 score Project related capability 88 88 100 88 100 88 88 88 75 100 supplier 1 supplier 2 supplier 3 supplier 4 supplier 5 supplier 6 supplier 7 supplier 8 score Quality/Certificates
  • 17. Final Offer Summary – Transformer - 3 suppliers provide quotation with datasheet. © 2019 Dragon Sourcing. All rights reserved. 17 1 2 3 4 5 6 7 8 9 10 11 12 # Supplier name 500MVA,3Phase400/220/33KV 315MVA,3Phase400/132/33KV 315MVA,3Phase400/220/33KV 200MVA,3Phase220/132/33KV 160MVA,3Phase400/220/33KV 160MVA,3Phase220/132/11KV 160MVA,3Phase220/132/33KV 105MVA,1Phase400/132/33KV 105MVA,1Phase400/220/33KV 100MVA,3Phase132/33KV 80MVA,3Phase132/33KV 50MVA,3Phase132/33KV 1 Supplier 1 0.5 0.4 0.3 2 Supplier 2 2.3 1.8 1.0 1.4 0.8 0.9 0.7 0.5 0.5 0.4 3 Supplier 3 2.4 2.0 1.9 1.3 1.1 1.1 0.9 0.8 0.7 0.6 0.4 FOB price ( M USD)
  • 18. Final Offer Summary – GIS - 4 suppliers submitted offer with proposed drawings © 2019 Dragon Sourcing. All rights reserved. 18 # Supplier name FOB price - 220 KV GIS (M USD) 1 Supplier 1 1.5 2 Supplier 2 1.6 3 Supplier 3 1.8 4 Supplier 4 1.8
  • 19. Conclusions ✓ All the recommended suppliers are very well qualified (completed certificates, strong financial background and global experience) ✓ All recommended suppliers are vertical integrated mails having all the production process in house ✓ 2 suppliers have been visited by Sterlite with very good impression. More meetings/visits will be arranged in terms of RFI score. ✓ DS recommended suppliers are likely to become strategic partner of Sterlite. 15© 2019 Dragon Sourcing. All rights reserved.