a case study of biomerieux, pharma client in china

Pharma client case study

May 2010

Dragon Sourcing - 龙源 Your Tailored Sourcing Approach to Asia

© 2010 Dragon Sourcing. All rights reserved.2

Agenda

A. Context and Products

B. Sourcing Strategy

C. Results & Conclusions

2© 2010 Dragon Sourcing. All rights reserved.


Context

• Major Biotechnology company– Over 45 years of experience in the field of infectious diseases– Established in more than 150 countries– Specialized in in Vitro diagnosis

• Interested in analyzing the market price of Chinese suppliers specialized in the manufacturing of sterilized & packaging products

• Selected Dragon Sourcing as Procurement Service Provider responsible for identifying, qualifying and selecting best in class Chinese suppliers.



Products included in the project scope were the following


Biological Cardboard packaging Labels and film Plasticware

Human Serum

Horse serum


Agenda


B. Project Approach




• 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.

The project was focused on qualifying and selecting new Chinese suppliers capable of challenging western incumbents

Supplier Identification and pre-qualification Similar samples acquisition Supplier audits + selection

Key

act

iviti

es



The first step was to develop a comprehensive understanding of the product requirements, e.g.: Petri dishes

Product Name Petri dish 90mm

Picture

Annual Quantity (pcs) 40,000,000

Measurement Please refer to Technical Drawing CDC/DCP/031

Product technical data Polystyrene choc White, 90 diam, Sterilization required level 100

Color Transparent

Other specifications

• These Boxes are designed to host sterile gelose and study germs-antibacterian products interaction•Items must be placed in clean Polyethylene bags of 31 items•The bags are put into 2 bags folded so as to protect them from the dust of the carton•The Box must be exempt of scratches, stain, solid or Liquid•The Box must be exempt of Dust and plastic fragment•The Box must be exempt of Oil Depot from the plastic injection process•Be sure to avoid any plastic yarn resulting from the injection process and that could create free particles



Then a comprehensive database of potential suppliers was built

Category Product Name#

Suppliers identified

# Suppliers

pre-selected

# RFI/RFQ sent

Serum Product A 23 13 13

Plastic

Product B

49 30 30Product C

Product D

Product E

CradboardProduct F

35 29 29Product G

Film and adhesive

Product H 47 9 9

Product I 48 44 37



An RFI/RFQ process was administered to filter out the most capable suppliers

To 收件人: Mr Dragon sourcing employeeEmail 电子邮件: [email protected] 电话: 021-6141XXXXFax 传真: 021-6141XXXX

Company Name公司名称Address地址Town城市Province省份

Company Website公司网址

Contact Person联系人Title职位Email电子邮件地址Tel电话Fax传真Mobile phone手机

Dragon Sourcing Ltd. 龙源有限公司

CONTACT INFORMATION联系信息

COMPANY INFORMATION公司信息

Company Background公司规模

Are you a producer or distributor?贵司是生产商还是经销商？When your company was founded?贵司是在哪一年成立的？What is the nationality/region of your company?贵司的投资主体是来自哪个国家/地区？What is your capital amount (in RMB)?贵司的资产总额是多少？（元/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 Western Clients?

Customers客户名称

Industry行业

Country国家

% of sales百分比

2008 207Revenue/Turnover (in RMB)收入/销售额 (人民币)

Who are your top 5 Customers（including China buyers)?销售额排前5 ( )名的客户包括中国买家

2009

How many years have you been in laboratory Plasticware formedical application business?贵司从事实验室防护服类产品行业有几年的经验？

Do you have real production experience of the products listed?Y/N贵司对右列产品是否有实际生产经验？(是/否)

Name名称

Y/N是/否

Annual productionvolumn in 2008

2008年产量

UoM单位

Item A

Item B

Production capacity生产能力

Yes / No是/否

ISO 9001ISO 14000

Others

What quality and environmental registrations doyou have?贵司目前已通过何种质量/环境体系认证?

Quality, Environmental and Product Certification质量,环境与产品认证

Name of Certificate证书名称

What international/domestic product certification doyou have?贵司目前已拥有何种国际/国内产品认证?

Item name产品名称

Description/ Use(描述)

Product picture 产品照片

Annual Qty.年需求量

Dimension尺寸

Material type原料

Flute Grade楞型

Thicknesstolerance厚度公差

Weight perunit (Kg)重量/一件

Surface perunit (m2)重量/一件

Printing 印刷Aspect(品质)

Ex-work price(出厂价) RMB

VAT amount(含增值税价格)

RMB

Transportationcost to

Shanghai(China) 货送上海

运费 RMB

Delivered priceSHANGHAI货到上海价格

(ex-work price + VAT +transport price) RMB

Packing requirement包装要求

Number of units perpallet每托数量

Item A (036 84266)

-Corrugated cardboard boxused to pack Petri dish withcell culture (medicalapplication).-The use requires highcleanliness

2 million piecesper year

- cfr sheet 6 drawing- Tolerance +/- 1mm- Internal dimension mm: 183 X 93 X 150- Flat dimension mm: 520 X 281Fold lock pre-cut :- Allows flat folding after use- Flexion tolerance: max 3%- Pre cut s marked enough to allow easy manualrip off, resist without breaking to mechanicaloperations of shaping

PURE VIRGIN PULPStarch glue

E (NF Q 03030)

1,60 mm (+/- 0.05 mm)

E flute0.06 0.15

- FLEXOGRAPHY- PANTONE COLOR: BLUE 281 U- Ink: heavy metals content conform to -directive EN71(CONEG), 94/62 CE- Printing centered: +/- 3mm- Biomerieux provides elements for photogravure ; logocalibration, position, code number, recycled logo- No deformation of the characters- No irregularities- High resistance to abrasion (no stain when used)

- Grammage

- Averagethickness

- Pressure

- Spreading

- Flat compression- COBB (30min)

368 gr/m2

1.7mm

550KPa

3.9 KN/m

>=155KPa aux 100/canRecto < 155 gr/m2Verso > 400 gr/m2

No dirt, fat trace, fingertrace, ink trace, No impact,tearing on exterior

￥0.0000

- Packed side/reverse- Plastic film around for protection- Polyethylene insulating sheet placed betweenthe pallet and the first layer to avoid humiditygoing up.- Piece of carton on the top of the pallet- Clean pallet (no contaminant), no stackablepallet- Label with information (supplier, reference,quantity, batch number, order number, …)

Technical and Mechanical properties技术和物理性能

Price (报价)(RMB/piece) Packing requirement包装要求

Corrugated cardboard specifications瓦楞板要求

Contact information &

company information

Company background

Production capacity

Quality management

Packaging informationPricingProduct information



Suppliers’ quotation were collected and validated

Average 0.31 RMB

Aberrant data should not be considered


Company and Contact Information

Company Name Supplier 32

Main Industry Packaging

Town

Province Shanghai

Website

Contact Person Fred

E-mail Fred [email protected]

Tel 86-021-591XXXXX

Fax 86-021-591XXXXX

Company Background

Year Founded 1994

Company structure Foreign Investment

Company activity Manufacturer

Main factory locations Shanghai

Company nationality America

Capital (USD) 75.7 million RMB

Work Floor Size (m2) 20,000sqm

Turnover (in RMB)

2007 N/A

2008 N/A

2009 N/A

A

Export (Y/N) Yes

% sales export to main markets in 2009

US (%) N/A

EU (%) N/A

Japan (%) N/A

Others(%) N/A

Total (%) N/A

Top 5 Customers

1 Panasonic

2 Nestle

3 Carrefour

4 NSN

5 Wyeth

Human Resources

Employees 380

People in each position

Quantity

Sales & management 6

R&D staff 8

Quality control 12

Production Supervision 4

Factory worker 260

Logistics 43

Corporate Responsibility

Adhere to all rules and regulations in respect to(Y/N)

Child labor Yes

Environmental issues Yes

Health and safety issues Yes

Willing to sign a confidentiality agreement (Y/N) Yes

Medical Packaging Client

Have or not Yes

% production 10%

And detailed supplier profiles were developed


Production Capacity

Total maximum production capacity in 2009 (m2/year)

54 Million m²/year

Actual annual production in 2009 (m2/year)

48 Million m²/year

Equiped with fire protection Yes

Printing 4 colors

Flute produced

E Yes

Origin of Paper

Kraft Testliner

Country (%) Country (%)

China 90 China 90

USA 10 USA 10

Paper supplier Quantity

Kraft Testliner

5 5

Quality & Environmental Registration

Certificate Date of certificate Certifying organization

ISO 9001 21/02/2001 BSI Management Systems

ISO 14000 01/03/2002 BSI Management Systems

Others 10/05/2004 BSI Management Systems

Quality Control equipment

Grammage Yes

COBB Yes, absorption detector

Others

Compression Testing Machine Computer Control compression testing machinestensile testing machine paper, cardboard) bursting strength testerPuncture strength Constant Temperature and Humidity

Printing Equipments

Name Type Producer Date Acquired Qty.

Seven lines Width 1100-2200, Speed 150M/min United States 1995 1

Four-color printing press Speed 3000pcs / h Taiwan, Shanghai, Guangdong 2004 4

Automatic Cut Prototype Size 2000 * 3500mm Shanghai 2005 1

Semi-automatic die-cutting machine Speed 2000pcs / h Shanghai 2007 1

Automatic stick box machine Speed 9000pcs / h Japan 2009 1

Automatic round molding machines Speed 3000pcs / Guangdong 2007 1

And detailed supplier profiles were developed (cont’d)


Factory pictures

And detailed supplier profiles were developed (cont’d)


Agenda


B. Sourcing Strategy




The process resulted in the reception of many reliable and competitive quotes from several qualified suppliers

Category Product Name # Suppliers identified

# Suppliers

pre-selected

# RFI/RFQ sent

# intend to respond

Filled in RFI/RFQreceived

Average price

(RMB/piece)

Quotes per item

Serum Product A 23 13 13 11 9 908 9

Plastic

Product B

49 30 30 15 10

0.81 4

Product C 1.32 4

Product D 34,5 10

Product E 0.087 8

Cradboard

Product F

35 29 29 13 60.30 6

Product G 1.42 6

Film and adhesive

Product H 47 9 9 3 3 0.39 3

Product I 48 44 37 20 14 0.37 14

TOTAL 202 125 118 62 42 N/A N/A

a case study of biomerieux, pharma client in china

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