Double wall Glass Bottle Sourcing Project Case Study by Dragon Sourcing

Dragon Sourcing - 龙 源 Delivering sustainable sourcing value from emerging markets

Bottle Sourcing Project – Case study report

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

2

DS launched sourcing activities RFI and RFQ for Food Double wall Glass Bottle in China

Product & Country

China

Double Wall Glass Bottle

3

New thread design received

4

Specification of the product Product Specifications

Information

Picture & Documents

Project Deadline

Drawing asap / present product Feb

Target sourcing market

China

Material Data

Glass must be arsenic and heavy metals free Glass must pass the LFGB and FDA test

Current price (FOB US$), Target price

Target price XXX USD

Annual Volume & P Frequency

15.000 pcs/year – First order: 5000

NDA needed (Y/N)

No NDA

Suppliers NOT be included (Y/N)

None, but contact of current contacted supplier was passed

Require a Sample

Not discussed yet

Mention Client ? (Y/N)

No, since it is delivery in China from China, not mention client name and keep local delivery

Technical information

Product specifications document

Suppliers capabilities - Certifications - Production equipment/Process - Final Testing requirement

Pass FDA tests (SGS) Bottle needs to be clean, no heavy metal content, transparent (no arsenic use)

Packaging requirements

Not discussed yet

4-5 criteria for phone pre-screening

Not discussed yet 5

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

6

The project is scheduled on 8 weeks.

Phase

Process

Weeks

Collect information from client

1

Questions clarification with DS & Client

1

Identify list of potential suppliers in China

1

Launch supplier phone screening

2

Develop the RFI doc jointly with Client

2

RFI to finalize & approve by Client

1

RFI send out & follow-up

2

Develop the score card doc jointly with Client

2

Analyze responses & rank suppliers

2

Supplier selection

Recommend suppliers to be audited / samples ordering / drawing confirmation

1

Sampling

Collect and send supplier’s samples

3

Client confirms what are the suppliers to audit

2

Suppliers visit preparation

2

Suppliers audit

1

Final scoring report for audited suppliers

2

Demand & Analysis

Supplier identification

1 RFI/RFQ process

2

Steps

Supplier Audit

November 17

December 24

7

1

8

15

Not started

Jan 22

29

Started

5

Completed

Over 42 suppliers in China, 38 RFI/RFQ were sent, 24 suppliers intend to respond, 18 sent RFI and/or Quotation Scully project - supplier follow-up

•

45

Suppliers identified Suppliers contacted RFI/RFQ sent Intend to respond Sent RFI&RFQ completed

4 suppliers not reachable

# of Suppliers 42 38 38 24 12 (18 only quote)

40

14 Suppliers gave up No reply, only focused on steel or plastic products, Traders, not interested Don’t make this product

35

30

6 suppliers did not sent RFI 7 suppliers gave up

25

20

42 38

15

25 10

18 12

5

0 # Suppliers identifed

# RFI/RFQ sent

# Confirmed ITR

8

# Quotes received

# RFI received

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

9

Among 18 quotations received, 13 suppliers quoted according to Client’s drawing (DS RFQ).

It was verified that all quotes exclude lid

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Supplier 5

Supplier 6

Supplier 7

10

Supplier 8

Supplier 9

Supplier 10

Supplier 11

Supplier 12 Supplier 13

5 other suppliers quoted their current products only. Considering the short project timeline and that supplier don’t fill in RFI/RFQ we’d suggest to exclude those suppliers for the next steps Supplier

Price (ex. Works)

Production information

Supplier 14

16.2 RMB/ pcs

• sample received quality of the thread not so good

Supplier 15

1.65 USD/ pcs

• Trader • 410ml similar bottl

Supplier 16

2.72 USD/ pcs

• 300 ML, it is coated, suitable for sublimation printing

Supplier 17

3.74 USD/ pcs (incl. lid)

• 330ML Lid, 462g: Lid PP/PC • Body: glass(food grade high borosilicate glass/HBG)

Supplier 18

4.40 USD/pcs (incl. lid）

• 320ML

11

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

12

For the 9 suppliers who provided filled in RFI/RFQ, each 8 sections of the RFI/RFQ were scored and weighted

Section

Weight

Business information

20%

CSR

5%

Process and Technology

5%

Production Capability

5%

Quality control and equipment

15%

Certifications

20%

Cooperation

5%

Quotation

25%

Total

100%

13

Business information, CST, Process & Technology, Production capability Business information

Year founded

Workfloor size (m²)?

Number of production facilities

Number of employees

Weight

10%

Scoring 1=After 2010 2=Between 2006 to 2010 3=Between 2000 to 2005 4=Between 1995 and 1999 5=Before 1995

5%

1=Less than 1,000m2 2=1,000m2-5,000m2 3=5,000m2-10,000m2 4=Above 10,000m2

2%

1=Only 1 facility 2= 2 facilities 3= 3 facilities 4= 4 facilities 5= 5 or more facilities

6%

1= Less than 50 employees 2= 50-100 employees 3= 100-300 employees 4= 300-500 employees 5= Above 500 employees

10%

1= 2 people 2= 3-5 people 3= 6-10 people 4= 10-15 people 5= above 15 people

Export experience

CSR

Weight of criteria

Scoring

Respect Child Labor Regulation

25%

0=No 1=Yes

Adhere to China Labor Law (36h)

25%

0=No 1=Yes

Adhere to all rules and regulation about environmental issues

25%

0=No 1=Yes

Adhere to all rules and regulation on safety issues

20%

0=No 1=Yes

Would sign a confidentiality agreement

5%

0=No 1=Yes

Process and Technology

Weight of criteria

Scoring

Have stable and long-term partners to supply raw material

30%

0=No 1=Yes

Have an equipment list

40%

10%

0= No export, no license 1= Less than 5 years 2= 5-10 years 3= More than 10 years

0=No 1=Yes 2=Yes and provided

Products specially developped for international market

5%

0= No 1= Yes

Production Process description provided

30%

0= Not provided 1= Provided with detais 2 = Provided, majority of processes in-house

Supplier has European customers

15%

0= No Only Chinese customers 1= Yes but no detailled provided 2 = Yes, detailled provided, small EU companies 3 = Yes, European /FR customers large corporations

Supplier provided e-catalogue

2%

0= No 1= Yes

Annual supply capacity in 2014

30%

0 = not provided 1 = provided

2013 Turnover in USD

5%

1= Less than 3M 2= Between 4 to 10M 3= Between 10 to 20M 4= More than 20M

Annual LVE supply capacity in 2013

20%

0 = not provided 1 = provided

Increase/decrease in supply capacity

10%

15%

0= No export 1= Export but not to Europe (<5%) 2= < 15% export to Europe 3= 15% to 30% 4 = 30% to 50% export to Europe 5= > 50% export to EU

0=Decrease 1=Stable 2=Increase

40%

1=Below 10% 2=Between 10-25% 3=Between 25-50% 4=Over 50%

Number of employees with good english communication skills

% of sales share

Top 5 Customers

15%

0=Mainly Asian, small coprorations.

1= Wordwide large corporations 2= EU main customers, large corporations

Production Capability

% of Double wall glass bottles products among all the categories you manufacture

14

Weight of criteria

Scoring

Quality, Certifications, Cooperation and quotation Quality control and equipment

Weight of criteria

Scoring

Certifications

Weight of criteria

0=No 1=Yes

Have ISO 9001

20%

0=No 1=Yes

5%

0=None 1=Have, rdetails not provided 2=Have, regularity provided 3=Have, several times per dayd & at different points of the production process

Have ISO 14001

20%

0=No 1=Yes

5%

0=None 1=Sample inspection following AQL 2=100% inspection

Other International Standards applied

25%

0=No 1=Yes

What is the rate of defect / rejected ?

5%

0=Above 5% 1=Between 2-5% 2=Between 1-2% 3=Below 1%

Agree to send product to SGS laboratory for FDA certiification

35%

0=No 1=Yes

Process for treating defects found

5%

0=Nothing is done, no reply 1=Clear process to separate, discard or rework

What is your internal rule regarding reaction time of quality claim?

5%

0 = No reply, no process 1 = Defined process detailled 2= Defined process including problemn solving options provided (reparation, replacement, etc.)

For how long are the QC records kept

5%

0=Below 6 months 1=Between 6 and 12 months 2=Between 12 and 24 months 3=Above 24 months

Supplier has incoming material inspection and report

5%

0=No 1=Yes

Supplier accepts 3rd Party QC

5%

Regularity of in-line quality inspection (Y/N)

Type of inspection conducted for finished goods

Quality Control equipment

5%

0=No details given 1=Between 1-3 equipment listed 2=4-6 equipment equipment listed 3=6-10 equipment listed 4=More then 10 equipment listed

Test the products before delivery

5%

0=No 1= Finished products Test listed

50%

0 = Not replied 1 = <2 2 = between 2-4 3 = Can meet 4 4 =Yes can meet all important (not sleeve, lightweight, 5 = Yes, all of them

Can meet all requirements listed from Client ?

Cooperation

Scoring

Weight of criteria

Scoring

Cooperation during RFI

50%

1= Poor 2= Satisfactory 3= Excellent

Completeness of RFI

50%

1= Poor 2= Satisfactory 3= Excellent

Quotation

Quotation competitiveness

15

Weight of criteria

Scoring

100%

0 = Quotes highest (20%) 1 = Above average price (20%-50%) 2 = 20%-50% lowest prices 3 = 20% lowest prices Below 1.20 USD Target price

The 11 suppliers who submitted RFI reply were scored. Average score is 63 %, 7 suppliers are above the average

Average 63%

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Supplier 5

Supplier 6

Supplier 7

16

Supplier 8

Supplier 9 Supplier 10 Supplier 11

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

17

10 suppliers were shortlisted as they provided quotation, RFI and mould information. Mould price is stable between 800 to 1,000 RMB, lead time could be decreased to 10-15 days for most suppliers

# Supplier Name

RFI received

RFQ Can make Scoring OK Thread Scoring % received Mould results 3D ?

Mould cost

Mould Lead time

Existing samples shipment status

Quotation / bottle Incl.

Excl. lid (incl. delivery & Tranport excl. lid) RMB/pcs

1

Supplier 1

YES

YES

YES

6

67%

TBC

1,000 RMB

15 days

Received

ok

ok

6.16 RMB

2

Supplier 2

YES

YES

YES

8

63%

Can’t open AI

No mould Hand made 85USD sample

15 days

Client has sample

ok

ok

8.7 RMB

3

Supplier 3

YES

YES

YES

7

65%

OK

100$ sample 100$ mould 1,300 TOTAL

10 days

N/A

ok

ok

9.8 RMB

4

Supplier 4

YES

YES

YES

2

71%

OK

950 RMB

11 days

On the way to DS

ok

ok

10.47 RMB

5

Supplier 5

YES

YES

YES

4

68%

TBC

TBC

NA

TBC

TBC

ok

11.8 RMB

6

Supplier 6

YES

YES

YES

3

70%

OK

800 RMB

8 days

Received

ok

ok

12.7 RMB

7

Supplier 7

YES

YES

YES

1

76%

OK

1,000 RMB

7-10 days

Received

ok

ok

13.95 RMB

8

Supplier 8

YES

YES

YES

9

61%

TBC

1,000 RMB

40 days (TBC)

Will be sent to DS on Friday

ok

No

14.5 RMB

9

Supplier 9

YES

YES

YES

5

68%

Ok

800 RMB

15 days

TBC

ok

ok

15.8 RMB

10

Supplier 10

YES

YES

YES

10

54%

Ok

6000 RMB

30 days

Received

ok

No

27.5 RMB

Not recommended for next steps (low score, difficult communication, high price, long lead time low reactivity） Recommended for next steps (score, reactivity, price, lead time）

Based on scoring, pricing and mould information, DS recommends to move forward with the 6 following suppliers 1, 6, 7 Others suppliers (2,3,4,5,8,9) could be interesting as well depending on priotiry on price or quality/scoring 18

5 Suppliers sent samples of their current product to DS, then sent to client

19

Agenda

1.

Project scope

2.

Project planning & progress

3.

Quotation sum up

4.

Suppliers scoring

5.

Summary and recommendation

6.

Relevant QC job for bottles

20

QC job - General information and Sampling standard

Product Name

Bottle

Order quantity (units)

7404 Pcs

CTN

1234 cartons

Supplier

FG

Inspection date

Mar 30th, 2018

Inspection type

Random Inspection

Sampling standard

MIL-STD-105E

Sampling level

General Inspection LEVEL II

Inspected sample size

200pcs+80 pcs(80 pcs measured dimensions)

Approval sample(s) available

No

Inspection location

Yongkang

Factory cooperation during the inspection

Good

Factory Quality organization

Good

Inspectorâ&#x20AC;&#x2122;s general opinion on the factory

Good

21

Product Details: Bottle

Dimension in mm (body) Height

213.7 +/- 1.0 mm

Diameter outside

71.6 + 0.1 / - 0 mm

Height innerpipe

199.7 +/- 0.3 mm

Logo Height

13.0+0/-1.0 mm

Diameter neck

41.1 + 0 /- 0.3 mm Gauge

Liquid content / water level

0.5 l +/- 5%

Picture

22

Defects analysis - summary

Defect Description

CRI

MAJ

MIN

Log printing defect

-

1

-

Scratch and caved

-

1

Push Button lock

-

Push button and printing Logo not align

-

-

1

Polishing defect

-

-

1

The bottle neck dusty due to polishing defect

Non-slip bottom

-

1

-

Non-slip bottom not in right place

# Total of defectives found

-

3

3

1

23

Comments

Push Button lock system loosen

Defect pictures Scratch and caved

Logo printing defect

24

Defect pictures

Non-slip bottom not in right place.

Push button and Logo not align.

25

Defect pictures Polishing defect.

Push Button lock system loosen .

26

Packing, storage and shipping marks inspection Storage condition .

27

Packing, storage and shipping marks inspection

Master Carton

Sample 1

Sample 2

Sample 3

Sample 4

Sample 5

Size(cm)

25*18.5*30.5

25*18.3*30.5

24.8*18.4*30.5

25.1*18.1*30.6

24.9*18.3*30.7

G.W(kg)

2.90

2.91

2.90

2.91

2.90

28

Inner Packing, Bar code , Mater carton and inner box product instructions inspection 6 inner boxes/carton.

Master carton and inner box bar code are the same.

29

Leaking Test, Sampling size: 13 bottles Fill in carbonated Drinks

Bottles placed on its side and keeping 60 minutes, Test result: Not found leaking

30

Dropping and leaking Test, Sampling size: 5 bottles From 0.75m height drop bottles to surface 3 times( onetime lid, on time side and one time base), Fill in water and placed on its side 30 minutes After dropping test, Test result: Not found plastic parts separate from bottle, Not found leaking

31

Printing stability test, Sampling size: 5 bottles Printing stability test Test result: Not found printing fade

32