Artificial Grass Carpet Case Study

Dragon Sourcing Your Tailored Approach to Emerging Markets

Artificial Grass Carpet Case Study

Agenda

1.

Objectives

2.

Approach

3.

Results

2

Objectives DS Supplier Market analysis Objectives

Context Client overall objectives •

Identify list of potential current and new potential suppliers worldwide to include in the RFI/RFQ process by leveraging, current Dragon Sourcing suppliers database, the web, external databases and various networks of experts

•

Develop the RFI / RFQ – jointly with Client – to include all key supplier qualification criteria (e.g.: financial, technology, manufacturing experience for similar products, capability, tooling, conception and development, corporate responsibility, quality, language skills, others to be defined….)

•

Administer RFI / RFQ process to ensure as high a return rate as possible

•

Analyze responses, prices and use balance score carding process to rank suppliers and recommend suppliers per category.

•

Provide Client with a profile for all of the recommended suppliers

To identify new potential competitive suppliers

Segments involved: •

•

Semi finished artificial grass carpet

3

Agenda

1.

Objectives

2.

Approach

3.

Results

4

Demand Analysis, total value of the three items: € 939,800.

HTS code: 5703.3088, import duty 8% from China and Australia, 0% from Turkey.

Photo

Spec

Unit price (€)

Volume (m2)

Total value (€)

Item 1

Raw material: polyethylene, Yarn count: 5,000 dTex ,Filaments:4 thickness core/base：110 micron , Width:5mm cross section : rectangular , Turns: 25 T/m , tensile strength (peak value):55N , elongation at break :50% ,shrinkage at 90-100°: 7% , coating temperature: 80-90 °C, light fastness: 7-8 blue scale, gauge: 3/16”, stitch rate of 10cm: 22, tufts density: 46200, pile height: 18mm

€ 3.96

60,000

€ 237,600

Item 2

Raw material: polyethylene , Yarn count: 10,000 dTex ,Filaments:8 ( Light green: 4, green : 4, tape shape: monofilament combined thickness core/base：155 micron , Width:1mm, Turns: 28 T/m elongation at break :100% ,shrinkage at 90-100°: 9% coating temperature: 80-90 °C , light fastness: 7-8 blue scale gauge: 3/8”, stitch rate of 10cm: 29, tufts density: 30450, pile height: 20mm

€ 6.77

60,000

€ 406,200

Item 3

polyamide polyethylene (green) yarn count (dTex) 6000 8000 filaments beige(2),light green(6) light green(4),green(4) thickness (micron) 185 170 width (mm) 0.6 1.0 tensile strength (N/peak value) 145 13.5 elongation at break (%) 35 40 shrinkage at 90°-100°(%) 10 4 coating temperature 90 90 light fastness 7-8 7-8 gauge: 3/8”, stitch rate of 10cm: 15, tufts density: 15750, pile height: 20mm

€ 7.40

40,000

€ 296,000

5

129 suppliers identified for RFI/RFQ

Activity

China

Australia

Turkey

India

Suppliers initially identified

95

10

11

14

RFI/RFQ sent-out

56

8

7

0

Suppliers intending to respond

26

1

2

-

RFI/RFQ declined/ discarded

30

7

5

-

RFI/RFQ received

26

1

2

6

-

29 suppliers submitted their offers, 26 in China, 2 in Turkey and 1 in Australia Suppliers

Region

Country

12 suppliers 6 suppliers 3 suppliers 2 suppliers 1 supplier 1 supplier 1 supplier 2 suppliers 1 supplier

Jiangsu Guangdong Shandong Beijing Hebei Anhui Shaaxi

China China China China China China China Turkey Australia

Heilongjiang

Jilin Liaoning

Xinjiang

Hebei Neimongu

Gansu

Shanxi

Ningxia Qinghai

Gansu

Xizang

BEIJING

Shaa nxi

Shandong

Henan

Jiangsu

Hubei

Sichuan

SHANGHAI

Anhui

Zhejiang Jiangxi

Hunan

Fujian

Guizhou Yunan

Guangxi

Guangdong

Hong Kong

7

Taiwan

Scoring and ranking of the identified suppliers

Supplier ranking

Price Competitiveness Cooperation

100

90 76

80

Quality Management

70 69 69 68

60

67 63 63 60 60 58 56 56

Production & Technology

51 47 46 45 44

40

39 39

Corporate Responsibility

28

24 Business Information

20

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Recommend suppliers: Top 9 suppliers to further price negotiation , samples test and factory audit.

8

Company Profile GENERAL INFORMATION

TURNOVER IN MILLION RMB

Supplier Name

2009

2008

2007

20

15.6

8.2

City Province

% SALES EXPORT TO MAIN MARKETS IN 2009 = 40%

Shandong

Contact person Job title

EU (%)

US (%)

Domestic (%)

Rest of the world (%)

15

12

60

13

Sales manager

Email

CUSTOMER BASE

Phone number

Customers

Fax number

Country

Industry

Percentage of sales

1. n/a

Mobile 2.n/a Website 3. n/a BUSINESS INFORMATION Found Year

2002

Manufacturer, distributor, or agent

Manufacturer

Capital in million RMB

30

Work floor size (m²)

80000

Number of employees

200

License for self import/export (Yes/No)

Yes

Years of export experience

8

4.n/a 5.n/a COMPLIANCE WITH LOCAL LAW Do you adhere to all rules and regulations in respect to child labour?

What is the age of your youngest and older employee?

How many hours per week, including overtime are working your employee on a regularly scheduled basis?

PRODUCTION How many years of experience in artificial grass carpet?

8

What is your production capacity per year? (in M2)

7,000,000

Does your company produce yarn in house (Y/N)?

Yes

Does your company export yarn (Y/N)?

Yes

Yes 20-55 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

9

Company Profile EQUIPMENT

Equipment

Qty

Description

Extruder

2

Starlinger from Ausria

Tufter

7

COBBLE &CTS from England and Austrilia

Coating Line

3

CTS & TRCC from Austrilia and Unitied States

QUALITY & ENVIRONMENTAL REGISTRATION ISO9001

Yes

ISO14001

Yes

FIFA

Yes Quality Control

How many QC people in your company?

20

What quality control equipment do you have in-house?

artificial athlete, Lisport, UV Tester, Breaking strength tester, coloreye, detax tester,

Do you accept the 3rd party QC?

Yes

How long do you keep QC record form?

3 years

10

Company Profile FACTORY PICTURES

11

Company Profile FACTORY PICTURES

12

Agenda

1.

Objectives

2.

Approach

3.

Results

13

Euro : USD=1:1.3962 USD : RMB=1:6.6732

Saving analysis, the highest saving percentage of item 1 is 44%, 40% for item 2, 42% for item 3.

Item 1 Ref

Saving

Item 2 Percentage

DDP

Saving

Item 3

Company

DDP

Percentage

Client

€ 3.96

Saving

Percentage

Saving

Percentage

1

Supplier 1

€ 2.22

€ 104,595

44%

€ 6.13

€ 38,351

9%

€ 6.13

€ 50,768

17%

€ 193,714

21%

2

Supplier 2

€ 2.93

€ 61,896

26%

€ 5.57

€ 71,768

18%

€ 4.71

€ 107,699

36%

€ 241,363

26%

3

Supplier 3

€ 3.32

€ 38,690

16%

€ 5.17

€ 95,902

24%

€ 5.21

€ 87,588

30%

€ 222,180

24%

4

Supplier 4

€ 3.34

€ 37,298

16%

€ 4.05

€ 163,199

40%

€ 4.44

€ 118,529

40%

€ 319,025

34%

5

Supplier 5

€ 4.07

€ 5.61

€ 69,447

17%

€ 4.27

€ 125,336

42%

€ 194,783

21%

6

Supplier 6

€ 4.30

€ 5.68

€ 65,270

16%

€ 5.23

€ 86,969

29%

€ 152,239

16%

7

Supplier 7

€ 4.55

€ 6.22

€ 33,246

8%

€ 6.16

€ 49,530

17%

€ 82,776

9%

8

Supplier 8

€ 4.71

€ 5.71

€ 63,414

16%

€ 5.25

€ 86,041

29%

€ 149,454

16%

9

Supplier 9

€ 4.71

€ 5.64

€ 68,055

17%

€ 6.95

€ 17,970

6%

€ 86,025

9%

10

Supplier 10

€ 4.78

€ 4.48

€ 137,672

34%

€ 5.87

€ 61,288

21%

€ 198,960

21%

11

Supplier 11

€ 5.06

€ 5.95

€ 49,490

12%

€ 5.06

€ 93,776

32%

€ 143,266

15%

12

Supplier 12

€ 5.33

€ 6.64

€ 7,720

2%

€ 6.18

€ 48,911

17%

€ 56,631

6%

13

Supplier 13

€ 5.63

€ 6.93

€ 5.28

€ 84,874

29%

€ 84,874

9%

14

Supplier 14

€ 6.49

€ 5.64

€ 5.64

€ 70,570

24%

€ 138,625

15%

€ 6.77

DDP

Total

€ 7.40

€ 68,055

14

17%