Dragon Sourcing - 龙 源 Delivering sustainable sourcing value from emerging markets
Sodium Chlorate (NaClO3) Sourcing Case Study
Shanghai, July 2016
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Agenda
1. Introduction
2. Approach
3. Suppliers involved in the RFI/RFQ
4. Quotation overview
5. Supplier profile Example
3
Introduction
Background
Client is a Brazilian pulp and paper company, with production capacity exceeding six million tons of pulp and paper produced in seven factories distributed in five Brazilian states. Much of this production is exported. The company has many distributor centers around the world and five branch offices in Brazil, China, Hungary, USA and Switzerland. The project is to identify capable and competitive suppliers for Sodium chlorate used in pulp and paper industry in China to allow the client having alternative source in China.
Geographical scope China supply market
Deliverables: RFQ Supplier profiles
© 2016 Dragon Sourcing. All rights reserved.
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Product Specifications
Product name Specs Picture & packagingSodium chlorate (NaClO3)
Sodium chlorate MIN. 96,5% •Physical aspect: Cristal•Purity MIN. 96,5%; •SODIUM BROMATE 0 TO 999 PPM;•POTASSIUM 0 TO 1,5%; •SODIUM SULFATE 0 TO 100 PPM;•INSOLUBLE 0 TO 0,2%; IN BULK.
© 2016 Dragon Sourcing. All rights reserved. 5
Agenda
1. Introduction
2. Approach
3. Suppliers involved in the RFI/RFQ
4. Quotation overview
5. Supplier profile Example
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Approach – Phase 1
No. Step Deliverables
1.Demand AnalysisWork with client to define and understand the products and requirements (specs, volumes, materials, production technology requirements)
Project Requirement Questionnaire
Kick-Off Report
2. Supply AnalysisIdentify 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-screeningSelection 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 AdministrationThe 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 ResponsesAnalysis 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
AuditMilestone 2: Shortlist for Audit Agreed
Phase 1: Supplier Pre-Qualification
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Agenda
1. Introduction
2. Approach
3. Suppliers involved in the RFI/RFQ
4. Quotation overview
5. Supplier profile Example
© 2016 Dragon Sourcing. All rights reserved.
Suppliers involved in the RFI/RFQ
26
11
5
0
5
10
15
20
25
30
Identified suppliers Supplier invited forRFI/RFQ
Suppliersresponded
Reasons for not being invited or not responding to the RFI/RFQ•Not relevant•Not willing to participate•Don’t produce or trader or agency•No longer producing•Always postponing and has not replied•Factory cannot export•Wrong contact details•No answering on the phone
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Supplier locations
Supplier name Region City1 Supplier 1 Liaoning Dalian2 Supplier 2 Hunan Changsha3 Supplier 3 Guangdong Guangzhou4 Supplier 4 Tianjin Tianjin5 Supplier 5 Sichuan Chengdu
Xinjiang
Gansu
Jiangxi
Zhejiang
BEIJING
Jiangsu
Guangxi
Hunan
Hubei
Qinghai
Ningxia
Shaanxi Anhui
Fujian
Neimongu
Shanxi Shandong
Xizang
Sichuan
Yunan
Guizhou
Henan
Jilin
LiaoningHebei
Guangdong
Gansu
SHANGHAI
Hong Kong
Taiwan
Heilongjiang
Sichuan
TIANJIN
© 2016 Dragon Sourcing. All rights reserved. 10
Agenda
1. Introduction
2. Approach
3. Suppliers involved in the RFI/RFQ
4. Quotation overview
5. Supplier profile Example
© 2016 Dragon Sourcing. All rights reserved.
5. Quotation overview
Company Manufacturer / Trader
Annual production in Metric Ton
US$ FOB China price / Metric Ton
Sea freight cost for a 20’ container to
SANTOS port Brazil
US$ CIF Santos (Brazil) price
1 Supplier 1 Both 30,000 $645
US$2,200
$733
2 Supplier 2 Both 20,000 $625 $713
3 Supplier 3* Manufacturer N/A $656 $744
4 Supplier 4Trader
(factory cannot export)
70,000 $675 $763
5 Supplier 5 Manufacturer 50,000 $670 $758
For 20’ sea freight calculation, loading based on 25 Metric Tons, hence sea freight fees account for US$88/Ton
Nota Bene*: Supplier 3 only send a quote instead of completing the RFI/RFQ, hence no company profile available
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Agenda
1. Introduction
2. Approach
3. Suppliers involved in the RFI/RFQ
4. Quotation overview
5. Supplier profile Example
© 2016 Dragon Sourcing. All rights reserved.
Company ProfileSupplier 1
GENERAL INFORMATION
Supplier Name Supplier 1
City Dalian
Province Liaoning
Contact person Mr. Ao
Job title Sales Rep.
Email Confidential
Phone number Confidential
Fax number Confidential
Mobile Confidential
Website Confidential
BUSINESS INFORMATION
Found Year 2005
Ownership State-holding
Manufacturer, distributor, or agent Both Manufacturer and Trader
Capital in million RMB N/A
Work floor size (m²) N/A
Number of employees 180
License for self import/export (Yes/No) Yes
Years of export experience 6
PRODUCTIONYears of experience in Sodium chlorate 30
Production capacity per year in Tons 30,000
TURNOVER IN MILLION RMB
2010 2009 2008130 115 106
% SALES EXPORT TO MAIN MARKETS IN 2009 = 0%
EU (%) US (%) Japan (%) Rest of the world (%)
N/A N/A N/A N/A CUSTOMER BASE
Customers Country Industry % of sales
N/A N/A N/A N/A
QUALITY & ENVIRONMENTAL REGISTRATIONCertificate Yes/No
N/A Yes
N/A Yes
COMPLIANCE WITH LOCAL LAW
Do you adhere to all rules and regulations in respect to child labour? No
What is the age of your youngest and older employee? 23~65
How many hours per week, including overtime are working your employee on a regularly scheduled basis? 40
Are all your employees working in a safe, healthy and clean working place? Yes
Do you adhere to all rules and regulations in respect to environmental issues? Yes
Are you willing to sign a confidentiality agreement? (Y/N) Yes
© 2016 Dragon Sourcing. All rights reserved.
Company ProfileSupplier 1
PRODUCTION EQUIPMENTS
Main equipments Quantity Description
Electrobath 2 sets Make NaClO3 with NaCl
Storing pool 4 Store liquid
Crystalizing tank 2 Crystalize NaClO3
Separator 2 Separate water from crystalized NaClO3
Dryer 1 Dry the surface of solid NaClO3
QUALITY CONTROL
How many QC people in your company? 16
What quality control equipment do you have in-house? N/A
How long do you keep QC record form? 3 years
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Company Profile Supplier 1
FACTORY PICTURES