Here is a case study by Dragon Sourcing on Coffee Pot Sourcing from Kitchen Equipment category of the Consumer Goods sector for the year 2018 covering China. For details contact: www.dragonsourcing.com
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Context
Project objectives:
• Primary objective is to secure savings through consolidating procurement and sourcing direct from
manufacturers in China market for Home & Kitchen relating products.
Geographical scope:
• China
Deliverables:
• RFI / RFQ Template
• RFI / RFQ report
• Balanced Scorecard
• Supplier profiles
• Recommended audit supplier list
• Sampling
• Contract Negotiation
5. • 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 RFP process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(logistics, import duties, ADT,..)
• Develop Business case and
implementation plan
• Shortlist suppliers based on
RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Conduct final negotiations and
select suppliers
• Finalise Contract
Below is the Dragon Sourcing standard 3 stage process
Feasibility Analysis
Supplier Selection
and Contracting
Procurement
Operations
• Manage P/O and agree payment
terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Keyactivities
5
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 RFP process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(logistics, import duties, ADT,..)
• Develop Business case and
implementation plan
• Shortlist suppliers based on
RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Conduct final negotiations and
select suppliers
• Finalise Contract
Stage 1: Feasibility Analysis is required by client
• Manage P/O and agree payment
terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Keyactivities
Feasibility Analysis
Supplier Selection
and Contracting
Procurement
Operations
6
7. The first step for feasibility analysis was to develop a comprehensive
understanding of the requirements
Product
name
Specifications
Order Volume
for RFQ
Picture
Moka Pot
- 4 cup with gift box and insert
- Material: Stainless steel, magnetic stainless
steel bottom
- Capability: 4 cup/ 6 cup
- Heat resistant handle
- With s pout
- Laser logo
- Packing: Magnetic color box, 2-3 inserts
500 pcs
7
8. 8
Then an extensive supplier data base is built in GSP leveraging multiple
sources of information
9. 9
If the category has already existed in GSP, we can add suppliers by product
category
10. 10
If the category does not exist in GSP, the external website can be accessed linking
from GSP and the relevant suppliers can be added as per project wise
Drag the supplier link and drop
11. After building a supplier long list, a telephone pre-screening process is carried
out to select the suppliers to be included in the RFI/RFQ process
11
Remark
•Phone screening process is a filtration stage from large database of suppliers identified to discard the suppliers not able to fit in the
minimum key criteria’s.
•Phone screening stage should be limited to key questions only (normally 4-5 questions)
•Please note, suppliers not able to answer the question for “Must have” will be considered as disqualified for next step of RFI /RFQ
process.
•Please specify if any key question need to be included which should be consider as a MUST criteria for the supplier.
No. Pre-screening question Reply
1 Are you manufacturer or trader?
Must
“manufacturer”
2 Can you export?
Prefer to reply
“Yes”
3 Do you have export license? Must have
12. Quotation Packing Information
Supplier's
product Pic
SPEC
HS
Code
FOB
price /
pcs
(in USD)
Magnetic
packing
box (in
USD)
FOB
port
MOQ
(pcs)
Mass
Producti
on Time
Sample
Lead
time
Sample
Fee
Packing
description
Packaging
dimension:
(L x W x H
cm)
G.W.
After completing the phone pre-screening process, we will begin to administer
the RFI/RFQ process
12
Business
Information
Production
Capacity
RFQ
13. And GSP can track all the steps including phone screening process, RFI-RFQ
process and so on
13
14. The RFI-RFQ responses are analyzed using a score card validated by the
client
14
Business
information
Production
Capacity
18. Summary of sample cost and sample lead time for recommended suppliers of
moka maker
18
Product Specifications Supplier FOB Price with Sample info
# Item
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 8 Supplier 10
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
FOB
price
Sample
cost
Lead
time
1
Moka pot 3 or 4
cup
$18.00 $30
15
working
day
$12.15 $29.50 2 days n/a n/a n/a $7.75 $15.00 7 days $11.20 $100.00 7 days $12.20 $15.00 7 days $17 $30
7-
10DAYS
2 Moka pot 6 cup $18.26 $30
15
working
day
$13.08 $29.50 2 days $10.20 $100.00 5 days $8.21 $15.00 7 days $13.00 $100.00 7 days $13.20 $15.00 7 days $18.8 $30
19. • 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 RFP process with pre-
qualified suppliers
• Analyse supplier responses and
calculate fully delivered price
(logistics, import duties, ADT,..)
• Develop Business case and
implementation plan
• Shortlist suppliers based on
RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample
development process
• Manage sample development
process
• Conduct final negotiations and
select suppliers
• Finalise Contract
Stage 2: Supplier Selection and Contracting
• Manage P/O and agree payment
terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Keyactivities
Feasibility Analysis
Supplier Selection
and Contracting
Procurement
Operations
19
20. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 1’s sample pictures
6cup moka maker
SS 304/1.2MM up bottle
SS 430/2MM down bottle
Overall Lid Handle
Upper part Boiler Bottom
20
21. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 2’s sample pictures
6cup moka maker
6cups upper part:304/1.0MM
boiler:430/1.0MM lids:304/0.8MM
Overall Lid Handle
Upper part Boiler Bottom
21
22. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 3’s sample pictures
6cup moka maker
ss304 upper body, ss430 boiler
Overall Lid Handle
Upper part Boiler Bottom
22
23. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 4’s sample pictures
6 CUP moka maker
304/0.8 mm upper part and 430/0.7mm lid
430/1 mm lower part . Induction bottom
Overall Lid Handle
Upper part Boiler Bottom
23
24. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 5’s sample pictures
6cup moka maker
SS201,0.5mm
Overall Lid Handle
Upper part Boiler Bottom
24
25. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 8’s sample pictures
6cup moka maker,
upper part 304/0.8 mm, boiler 430/1 mm
Overall Lid Handle
Upper part Boiler Bottom
25
26. 1st round sample – All 7 suppliers are selected for sampling
- Supplier 10’s sample pictures
6cup moka maker
upper pot:304 Stainless Steel
lower pot:430 Stainless Steel
Overall Lid Handle
Upper part Boiler Bottom
26
27. After testing of the 1st round sample, 2 suppliers are selected by the client for
requoting + answering the modification questions and finally supplier 4 is selected for
2nd round sample
27
Supplier
Modification request
Water filling line(Boiler)
Coffee funnel easily
removable
Gap between inside wall
and bottom(Upper part)
Hinge design
Supplier 2
No need, water can't exceed
the valve
Yes, add a spring( material
304)
Yes, add a lid No, can not improve
Supplier 4
No need, water can't exceed
the valve
Yes, add a spring( material
304)
Yes,add a lid Yes, we can
Supplier
Updated Price
Sample fee Lead time4 CUP 6 CUP
Product unit price Gift box Price Product unit price Gift box Price
Supplier 2 $11.97 $1.00(estimated) $12.90 $1.00(estimated) USD 148 1 week
Supplier 4 $7.65 $1.50(estimated) $8.85 $1.50(estimated) USD 153 2 weeks
28. Add a lid to
avoid Gap
between
inside wall
and bottom
(Upper
part)
1st
round sample 2nd
round sample
Gift box is
required for
the 2nd
round
sample
1st
round sample 2nd
round sample
No packaging
2nd round sample from supplier 4 according to client’s modification requirement
28
Add a
spring
( material
304) for
coffee
funnel
easily
removable
1st
round sample 2nd
round sample
No spring
Change
the hinge
design
1st
round sample 2nd
round sample
Spring