Case Study - Wire mesh sourcing

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Wire mesh sourcing Case Study

Agenda

1. Sourcing

2. Supply management

© 2015 Dragon Sourcing. All rights reserved.


ObjectivesContext

Overall objectives : Identify new potential competitive suppliers in China.

Categories involved• Wire mesh

Dragon Sourcing approach

1. Demand Analysis: Work with client to define and understand the products and requirements (specs, volumes, materials, production technology requirements)

2. Supply Market Analysis: Identify long list of potential suppliers in China by leveraging B2B Websites, DS Database, Fair catalogues, Chamber of Commerce, Magazines, Network, References.

3. Telephone Pre-screening: Selection of suppliers to be included in the RFI/RFQ process by telephone pre-screening based on agreed simple criteria (e.g. capability to make the product, minimum company size, interest in participating)

4. Administer the NDA: Administration and chasing for completion of the NDA with suppliers that have been preselected

5. Develop RFI/RFQ & Scorecard template: Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre-qualify the capabilities of the suppliers, including: Background, Financials, Client and product experience, Quality certification & processes, Social Responsibility, Manufacturing/technology capability

6. Administer the RFI/RFQ: The RFI/RFQ is distributed to the relevant suppliers who have signed NDA, with telephone follow-up to push for maximum participation.

7. Analyze RFI /RFQ Responses: Analysis of RFI/RFQ responses to objectively rank the suppliers by capability and competitiveness, and to develop sense for price points

MilestonesStarted FinishedNot-started Delayed

The project is scheduled for 10 weeks period.

Steps Who W0 W 1 W 2 W 3 W 4 W 5 W 6 W 7 W 8 W 9 W 10

0 Kick off meeting Client/ DS

1 Demand Analysis: Client/ DS 　　　　

2 Supply Market Analysis: DS

3 Telephone Pre-screening: DS

4 Administer NDA DS

5 Develop RFI/RFQ & Scorecard template: Client/ DS

6 Administer the RFI/RFQ DS

7 Analyze RFI /RFQ Responses: Client/ DS



Product descriptionHot Dip Galvanized Wire Mesh/ 0.66mm x 1" x 500mm x 2800m

Product Name Wire mesh Product picture

Current suppliers XXXXX

Specifications

Wire diameter: 0.66mm (+/-0.02mm), Mesh size: 25.4mm (+2mm/-0mm), Zinc coated: 30g, Tensile strength (Min):450N/mm2, Length: 2800m (+5m/-0m), Width: 500mm (+/-2mm)

Destination Europe & Asia

Packaging 2 rolls / pallet, 20 pallets / 20’FCL100cmx100cm solid wood pallet

HS code & duties 73143900 & 0.0%


102 suppliers initially identified, 28 RFQ received.

Steps # of suppliers

Suppliers initially identified 102

RFI/RFPQ declined / can not meet specs 27

RFI/RFQ sent-out 75

Intend to respond 28

RFI received 17

RFQ received 28

Price comparison


100

139

100 112

91 103 110 108 105

122

101 100 90

101 97 106

128

97 108

93

150

93 105 100 106 114 114

91

Supplier price comparison with current price


Company background Weight of criteria Scoring Max Score

per criteriaWeight of

the section

Manufacturer or agent 30% 0.15= Agent0.3= Manufacturer 0.3

10%Turnover in Million RMB 50%

0.1= < 10M 0.25= 10 - 50M0.5= > 50M

0.5

Capital (in Million RMB) 20%0.05= < 5 M0.1= 5 - 20 M0.2= > 20 M

0.2

Subtotal 100% 　 1.00 10%

Export experience Weight of criteria Scoring Max Score

per questionWeight of

the section

% of the turnover dedicated to Export for western market 15%

0.05= less than 10%0.1= between 11% - 50%0.225= more than 51%

0.225

15%Main Export Market 45%

0.1 = Asia0.3 = America0.675 = Western Europe

0.675

Who are the main customers 40%

0.2=Local customer0.4=European or US customer0.6=famous European or US customer

0.6

Subtotal 100% 　 1.50 15%

Production capabilities Weight of criteria Scoring Max Score


the section

Hex weaving machines (sets) 80%0.4=Less than 50.8=Between 5-101.2=More than 10

1.215%

Testing machines 20% 0= No0.3= Yes 0.3

Subtotal 100% 　 1.50 15%

Quality system Weight of criteria Scoring Max Score


the section

Does the factory have ISO9001 certificate? 50% 0= No

0.5= Yes 0.5

10%

Does the factory produce wire ? 50% 0= No

0.5= Yes 0.5

Subtotal 100% 　 1.00 10%

Price Weight of criteria Scoring Max Score


the section

Price level-Hot Dip 40%0= 5% above current price 1=+/-5% of current price2= 5% below current price

2

50%Price level-Electric galvanized 40%0= 5% above current price 1=+/-5% of current price2= 5% below current price

2

Price level-SS wire 20%0= 5% above current price 0.5=+/-5% of current price1= 5% below current price

1

Subtotal 100% 　 5.00 50%

Total scoring 10.00 100.00%

Score card template


Company ProfileXXX

GENERAL INFORMATION

Supplier Name XXX

City Shijiazhuang

Province Hebei

Contact person XXX

Job title Sales

Email XXX

Phone number XXX

Fax number XXX

Mobile XXXWebsite XXX

BUSINESS INFORMATION

Found Year 1996

Capital in million RMB 3 million

Work floor size (m²) 6600Number of employees 130

PRODUCTION CAPACITYTotal maximum production capacity (2011), please specify Tons: 6000 tons

Actual annual production ( in 2011) 6000 tons

Actual hexagonal wire mesh production ( in 2011) N/A

How many shifts per day do you operate? N/A

Do you manufacture galvanized wire in house? N/A

TURNOVER IN RMB

2011 2010 2009

50million 60 million 45 million

% SALES EXPORT TO MAIN MARKETS IN 2011

US (%) EU(%) Others (%) Total (%)

20 30 10 50

CUSTOMER INFORMATION

Customers Industry Country Percentage of sales

1. N/A N/A Middle East N/A

2.

3.QUALITY & ENVIRONMENTAL REGISTRATION

Certificate

ISO 9001 Y

COMPLIANCE WITH LOCAL LAWDo you adhere to all rules and regulations

in respect to child labor Chinese laws? (Y/N) Y

Do you adhere to all rules and regulations in respect to environmental issues?

(Y/N) YDo you adhere to all rules and regulations

in respect to health and safety issues? (Y/N) Y


Company ProfileXXX

Production EquipmentWelding machine Y,

Hex wire mesh weaving machine Y,

Wire drawing machine Y,

Bar straightener Y,

Punch machine Y,

Pull test machine 3

Mold machine Y,

Factory pictures

Agenda

1. Sourcing

2. Supply management



Wire mesh supply management, DS manage purchasing to payment.

Placing PO

Arrange production

Audit before delivery

Logistics FOB/CIF/DAP/DD

P

Payment


Purchase order is sent to supplier specifying all details.

Dragon Sourcing Ltd 7/F Hong Kong Trade centre,161-7 Des Voeux Rd Central

Hong Kong SAR

PURCHASE ORDER Date: XXX

TO: XXX 　 P/O OPCO XXX 　　XXX 　 P/O DS REF XXX 　　XXX 　 PAYMENT TERMS T/T within 60 days after B/L DateXXX 　 DELIVERY TERMS FOB Tianjin 　　　　　 DELIVERY DATE XXX 　　

　　　Line DESCRIPTION Unit Quantity COST/UNIT AMOUNT

　　 EURO EURO

1 Hexagonal Wire mesh 　 SQM 64,000 XXX XXX 　 25 x0.66x100cmx200m 　　　　　　　　　　　　

REMARKS: 　　 Sub Total XXX 1.Pls stick checklist inside each container 　　　　Agent: 　　　　Lamh Tang (Mr.) 　　　　Tel: 86 0755 8268 7567 Updated: 0755 2227 4513 Mobile:86 159 8675 4752 　　　　Email: [email protected] 　　　　　　　　　　　Confirmed and accepted by:XXX Dragon Sourcing Ltd

　　　Authorised Signatories Authorised Signature


Quality is checked for each container, wire diameter, zinc coating, width, etc.

CHECKLIST FOR MATERIALS

　　　　　　　　　　　Customer: 　 XXX

Customer Purchase Order No. 　 XXXFactory: 　 XXX

Description of material + item number 　 25x0.66x1000mmx200m

　Description Mesh size: Wire diameter

(mm)Thickness of Galv. Coating of the wire

(gr/m2)Width of the roll

(mm)Length of the

roll (m)Weight of the

roll (kg)Distance between rolls (mm) if 2 on one core

Inner diameter of roll (mm)

Outer diameter of roll (mm)

Roll1

1 27mm 0.65 35-45 1010 202 51.2 　 90 2642 27.2mm 0.65 　　　　　　　3 27mm 0.65 　　　　　　　4 26.8mm 0.64 　　　　　　　5 27.2mm 0.64 　　　　　　　

Roll2

1 27mm 0.65 35-45 1010 202 50.6 　 90 2662 27mm 0.65 　　　　　　　3 26.8mm 0.65 　　　　　　　4 26.8mm 0.65 　　　　　　　5 27mm 0.65 　　　　　　　

Roll3

1 27mm 0.65 35-45 1010 202 51.4 　 90 2652 27mm 0.65 　　　　　　　3 27.2mm 0.64 　　　　　　　4 26.8mm 0.65 　　　　　　　5 26.8mm 0.64 　　　　　　　

Roll4

1 27.2mm 0.65 35-45 1010 202 51 　 90 2642 27mm 0.65 　　　　　　　3 27mm 0.65 　　　　　　　4 27mm 0.65 　　　　　　　5 27.2mm 0.64 　　　　　　　

Roll5

1 26.8mm 0.65 35-45 1010 202 50.8 　 90 2652 26.8mm 0.65 　　　　　　　3 27.2mm 0.64 　　　　　　　4 26.8mm 0.65 　　　　　　　5 26.8mm 0.65 　　　　　　　


Customs documents including B/L, invoice, packing list are prepared and sent to client.


Detailed dashboard will be provided monthly including PO value, delivery status, etc. Below is monthly ordering containers data.

Sep -

2009

Nov -

2009

Jan

- 201

0

Mar -

2010

May -

2010

Jul -

2010

Sep -

2010

Nov -2

010

Jan -

2011

Mar -

2011

May -

2011

Jul -

2011

Sep -

2011

Nov -

2111

Jan -

2012

Mar -

2012

May -

2012

Jul -

2012

Sep -

2012

Nov -

2012

Jan -

2013

Mar -2

013

May -

2013

Jul -

2013

Sep -

2013

Nov -

2013

Jan -

2014

Mar -2

014

May-2

014

July-

2014

Sep-2

014

Nov-2

014

Jan-

2015

Mar-2

015

May-2

015

0

5

10

15

20

25

30

8

5

11

67

2

11

14

6

13

5

87

13

6 6

16

54

7

28

17

87

109

11

2

10

7

2

8

15

11

4

109

1214

12

6

12

8

11

5

8

11

14

2

6

21

56

19

1515

20

8

13

7

18

12

19

5

1413

16

5

2

Number of TEUs Ordered


We manage different products for clients in this industry but wire mesh is biggest volume

104 29 31

635

Number of Teus per Category

Aliminum foil Chemical Glass fleece Steel wire Knife Wire mesh

Date post:	07-Apr-2017
Category:	Services
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Case Study - Wire mesh sourcing

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