case study-facts on sourcing raw material

RAW MATERIALSCASE STUDY

Dragon Sourcing - 龙源 Your Tailored Sourcing Approach to Asia

© 2010 Dragon Sourcing. All rights reserved.

AGENDA


DRAGON SOURCING: MISSION

Dragon Sourcing’s objective is to help our clients create significant and sustainable value (cost, quality and service) in the procurement of their goods and services by leveraging the capabilities of LCC’s supply markets in Asia and Latin America.

We aim to develop long term relationships based on trust, full transparency and business integrity with a limited number of Western, Asian, and Latin American corporations, either:

– To support their procurement departments in the US, Latin America and Europe identify, qualify, select and manage on an on-going basis Asian and Latin American suppliers for export purposes

– To support their procurement departments in Asia implement world class sourcing practices for (1) their local needs, and (2) for their localization requirements

Our teams are located to closely integrate with our clients’ needs

Our clients are medium to large size corporations across a wide range of industries


Dragon Sourcing service offering covers the end-to-end sourcing process


SOURCING PROGRAM : 3 PHASES


SOURCING PROGRAM : PHASE 1


PRODUCT CATEGORIES


PHASE 1: 5 STEPS PROCESS


PHASE 1: STEP 1 - PRIORITIZATION CRITERIA DETERMINATION AGREED CRITERIA / WEIGHT FOR CATEGORIES RANKING


PHASE 1: STEP 2 - DEMAND ANALYSISProduct Specifications Analysis


PHASE 1: STEP 3 - POTENTIAL SUPPLIERS IDENTIFICATIONSUPPLIER DATA BASE


Product Spend value in US$ (20%)

Number of identified suppliers

(20%)

Domestic overall

production in volume

(10%)

Export regulations

and constraints

(10%)

Export Qty/Value

(5%)

Cost of transport as

a % (5%)

Import regulations and duties

(12.5%)

Logistics constraints

(12.5%)

Import Brazilian

Taxes (5%)

Max score(out of 5)

CATEGORY 1 5.0 5.0 5.0 2.0 0.0 0.0 4.0 2.0 4.0 3.7

CATEGORY 2 5.0 3.0 0.0 0.0 0.0 0.0 5.0 2.0 5.0 2.7

CATEGORY 3 4.0 3.0 5.0 5.0 5.0 5.0 2.0 4.0 4.0 3.9

CATEGORY 4 5.0 5.0 5.0 5.0 5.0 5.0 5.0 4.0 4.0 4.8

CATEGORY 5 5.0 3.0 0.0 3.0 5.0 3.0 5.0 4.0 4.0 3.6

CATEGORY 6 3.0 2.0 0.0 0.0 0.0 0.0 5.0 4.0 4.0 2.3

CATEGORY 7 2.0 5.0 5.0 5.0 5.0 4.0 5.0 4.0 2.0 4.1

CATEGORY 8 4.0 0.0 0.0 2.0 0.0 0.0 3.0 4.0 3.0 2.0

CATEGORY 9 3.0 5.0 5.0 5.0 5.0 3.0 5.0 4.0 3.0 4.3

CATEGORY 10 3.0 4.0 5.0 5.0 5.0 4.0 5.0 4.0 4.0 4.2

PHASE 1: STEP 4 - CATEGORIES RANKING PROCESSEXAMPLE OF CATEGORIES SCORING IN CHINA


PHASE 1: STEP 4 - CATEGORIES RANKING PROCESSEXAMPLE OF CATEGORIES SCORING IN INDIA

Product Spend value in US$ (20%)

Number of identified suppliers

(20%)

Domestic overall

production in volume

(10%)

Export regulations

and constraints

(10%)

Export Qty/Value

(5%)

Cost of transport as

a % (5%)

Import regulations and duties

(12.5%)

Logistics constraints

(12.5%)

Import Brazilian

Taxes (5%)

Max score(out of 5)

CATEGORY 1 5.0 4.0 0.0 3.0 3.0 0.0 4.0 2.0 4.0 3.2

CATEGORY 2 5.0 4.0 5.0 3.0 2.0 0.0 5.0 2.0 5.0 3.8

CATEGORY 3 4.0 5.0 0.0 3.0 1.0 5.0 2.0 4.0 4.0 3.4

CATEGORY 4 5.0 5.0 0.0 3.0 2.0 4.0 5.0 4.0 4.0 3.9

CATEGORY 5 5.0 3.0 0.0 3.0 3.0 4.0 5.0 4.0 4.0 3.6

CATEGORY 6 3.0 3.0 0.0 5.0 1.0 0.0 5.0 4.0 4.0 3.1

CATEGORY 7 2.0 5.0 0.0 5.0 5.0 5.0 5.0 4.0 2.0 3.6

CATEGORY 8 4.0 5.0 0.0 2.0 0.0 0.0 3.0 4.0 3.0 3.0

CATEGORY 9 3.0 5.0 4.0 3.0 4.0 3.0 5.0 4.0 3.0 3.9

CATEGORY 10 3.0 5.0 0.0 3.0 2.0 0.0 5.0 4.0 4.0 3.3


PHASE 1: STEP 5 - RECOMMENDATIONS OF 18 CATEGORIESEXAMPLE OF FIRST 10 CATEGORIES RANKING IN CHINA AND INDIA

CHINA INDIA

Category Score Rank Category Score Rank

CATEGORY A 4.8 1 CATEGORY C 3.9 1

CATEGORY C 4.4 2 CATEGORY E 3.9 2

CATEGORY E 4.3 3 CATEGORY A 3.9 3

CATEGORY D 4.2 4 CATEGORY D 3.9 4

CATEGORY G 4.1 5 CATEGORY H 3.8 5

CATEGORY H 4.1 6 CATEGORY G 3.8 6

CATEGORY I 4.1 7 CATEGORY J 3.7 7

CATEGORY J 4.1 8 CATEGORY I 3.6 8

CATEGORY M 4.0 9 CATEGORY M 3.6 9

CATEGORY B 4.0 10 CATEGORY B 3.5 10


PHASE 1: STEP 5 - RECOMMENDATIONS OF 18 CATEGORIESEXAMPLE OF FIRST 10 CATEGORIES RANKING IN CHINA AND INDIA

CHINA INDIA# Category # Category

CAT 4 SILICON METAL CAT 4 SILICON METAL

CAT 12 REFRACTORIES CAT 12 REFRACTORIES

CAT 19 ROUND STEEL BAR-ANODIC TIP CAT 19 ROUND STEEL BAR-ANODIC TIP

CAT 25 SQUARED STEEL BAR - CATHODE BAR CAT 25 SQUARED STEEL BAR - CATHODE BAR

CAT 1 CAUSTIC SODA CAT 16 SPECIAL LUBRICANT

CAT 5 ALUMINUM FLUORIDE CAT 5 ALUMINUM FLUORIDE

CAT 11 GRINDING MEDIA CAT 11 GRINDING MEDIA

CAT 9 ACTIVATED CARBON CAT 15 SODIUM SULFIDE

CAT 15 SODIUM SULFIDE CAT 2 AMMONIA

CAT 2 AMMONIA CAT 3 MAGNESIUM METAL

CAT 10 MANGANESE OXIDE/DIOXIDE CAT 10 MANGANESE OXIDE/DIOXIDE

CAT 16 SPECIAL LUBRICANT CAT 9 ACTIVATED CARBON

CAT 7 PLASTIC FILMS CAT 7 PLASTIC FILMS

CAT 14 AMMONIUM SULFATE CAT 20 SODA ASH

CAT 18 STEELL WIRE & CORDAGE CAT 8 EXPLOSIVES

CAT 13 FLOCULANT CAT 24 CARBOXY-METHIL-CELLULOSE - CMC

CAT 20 SODA ASH CAT 14 AMMONIUM SULFATE

CAT 3 MAGNESIUM METAL CAT 18 STEELL WIRE & CORDAGE


SOURCING PROGRAM : PHASE 2


PHASE 2 : 6 STEPS PROCESS


PHASE 2: STEP 1 - SUPPLIERS QUALIFICATION CRITERIAAGREED SCORING CRITERIA / WEIGHT FOR EACH CATEGORY


PHASE 2: STEP 2 - SUPPLIERS QUALIFICATION RFI / RFQ PROCESSEXAMPLE OF RFI


PHASE 2: STEP 2 - SUPPLIERS QUALIFICATION RFI / RFQ PROCESSEXAMPLE OF RFQ


PHASE 2: STEP 2 - SUPPLIERS QUALIFICATION RFI / RFQ PROCESSSUPPLIER DATA BASE


PHASE 2: STEP 2 - SUPPLIERS QUALIFICATION RFI / RFP PROCESSEXAMPLE OF COMPANY PROFILE


PHASE 2: STEP 3 - SUPPLIERS RANKINGEXAMPLE OF SUPPLIERS SCORING FOR ONE CATEGORY

Rank Supplier Name

US$ price / Ton

Company background

Business info

Corporate responsibility

Production &

TechnologyQuality Mgt Cooperation Price

Score out of 100

5% 15% 5% 15% 15% 5% 40%

1 NANJING $1680 4.00 15.00 5.00 12.50 10.50 5.00 40.00 92.00

2 WINLIN $1800 4.25 15.00 5.00 12.50 9.00 3.63 40.00 89.38

3 FENLIN $1760 2.83 12.19 5.00 15.00 9.00 0.75 40.00 84.77

4 XINJUN $1800 9.00 13.88 5.00 10.00 10.50 1.25 40.00 84.13

5 BEYLIN $1778 3.10 13.88 5.00 10.00 3.00 3.63 40.00 78.60

6 HUALIN $1810 1.58 12.88 5.00 10.00 1.50 0.00 40.00 70.96


PHASE 2: STEP 3 - SUPPLIERS RANKING AND AUDIT RECOMMENDATIONS

# Company Region City

1 SUPPLIER FUILIN Anhui Ningguo

2 SUPPLIER BEILIN LU Anhui Ningguo

3 SUPPLIER NANLIN Liaoning Anshan

4 SUPPLIER WUILON LTD Shandong Jinan

5 SUPPLIER BAOLING Shandong Jinan

6 SUPPLIER FUJUIN Shandong Jinan

7 SUPPLIER CHONGLIN Shandong Jinan

8 SUPPLIER NINLAO Anhui Ningguo

9 SUPPLIER JAING JU Anhui Ningguo

10 SUPPLIER XINLI Shandong Jinan

11 SUPPLIER XINJUN Shandong Jinan

12 SUPPLIER XING SHU Henan Zhangqiu

13 SUPPLIER FING SHI Shandong Jinan

14 SUPPLIER FAOLING LU Zhejiang Ningbo

15 SUPPLIER SHUNLIN Anhui Ningguo


PHASE 2: STEP 4 - SUPPLIERS AUDIT PROCESS AUDIT CONTENT


PHASE 2: STEP 4 - SUPPLIERS AUDIT PROCESS EXAMPLE OF AUDIT REPORT - FINAL SCORING


PHASE 2: STEP 4 - SUPPLIERS AUDIT PROCESS EXAMPLE OF AUDIT REPORT - FACTORY PICTURES


PHASE 2: STEP 4 - SUPPLIERS AUDIT PROCESS SUPPLIERS AUDIT STATUS REPORT


PHASE 2: STEP 4 - SUPPLIERS AUDIT PROCESS SUPPLIERS AUDIT STATUS AND ACTIONS REPORT


PHASE 3 - NEXT STEPS: PROCUREMENT OPERATIONS


NEXT STEPS: PHASE 3 - PROCUREMENT OPERATIONS

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