Case Study-Canned vegetable sourcing in China

Dragon Sourcing - éž™ ćş?

Delivering sustainable sourcing value from emerging markets

Food Sourcing Case Study Shanghai, Mar 2016

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

© 2016 Dragon Sourcing. All rights reserved.

•

Results

•

Appendix : suppliers location

2

Introduction

 Project Objectives Look for suppliers in India, China, Thailand and Turkey with secure savings through Dragon Sourcing professional sourcing steps for Food categories

    

Geographical scope China India Thailand Turkey (Turkey is not part of the contract scope but Dragon Sourcing team identified potential suppliers for both categories in Turkey )

 Deliverables:  RFI / RFQ and Score Card  Supplier profiles

© 2016 Dragon Sourcing. All rights reserved.

3

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

•

© 2016 Dragon Sourcing. All rights reserved.

Conclusions

4

Dragon Sourcing Approach For this case, only step one – “value discovery” is required by the client Supplier Selection and Contracting

Value Discovery •

Key activities

•

Analyse spend category in detail – Specifications and quality requirements – Volumes – Deadlines Analyse supply market and identify potential suppliers

•

Shortlist suppliers based on RFI/RFP process

•

Manage P/O and agree payment terms and details (L/Cs,..)

•

Audit shortlisted suppliers

•

Check in process production quality

•

Select 2-3 suppliers for sample development process

•

Conduct pre-shipment QC

•

Arrange logistics

•

Manage supplier performance

•

Monitor new sourcing opportunities

Pre-qualify potential suppliers through an RFI process

•

•

Manage RFP process with prequalified suppliers

•

Conduct final negotiations and select suppliers

•

Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)

•

Finalise Contract

•

Develop Business case and implementation plan

•

© 2016 Dragon Sourcing. All rights reserved.

Procurement Operations

Manage sample development process

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

© 2016 Dragon Sourcing. All rights reserved.

•

Results

•

Appendix : suppliers location

6

The first step of value discovery was to develop a comprehensive understanding of the requirements: below specifications table are received from client including 16 product references: canned mushrooms (11), canned beans (5) Category

Sub-cat.

Mushrooms

Food

Beans

Product name

Specs

Ref

art work

PIC

Samples received

Y Qtity

Current FOB (USD)

Target price (USD)

Pack

SKU Questions

C

1

Mushrooms whole, 400g

7340011341789

Y

18,480

0.715

can

1

H

2

Mushrooms, sliced, 185/115 g

7340011340294

Y

155,965

0.43

can

1

J

2

Mushrooms, pieces and stems, 170 g.

7340011438885

Y

=H

673,920

0.52

jar

1

?

Y

=H

745,920

0.52

can

1

G

5

Mushrooms, sliced, 280/170g

7340011351146

Y

76,923

0.6

jar

1

E

6

Mushroom sliced, 185/115g

7340011432449

Y

164,640

1.33

can

?3

B

7

Mushrooms , whole 390g

6415712600655

Y

134,784

1.05

can

1

F

8

Mushrooms, sliced, 390g/185g

6415719429914

Y

426,384

0.65

can

?2

D

9

Mushrooms, whole, 185/115g

7340011432432

42,336

2.03

can

?3

K

9

Mushrooms whole, 170 g.

7340011351139

Y

=D

45,792

0.78

jar

1

I

10

Canned whole mushrooms MINIS, 185g

6415712600235

Y

Yes, 6

151,200

0.7

can

1

A

11

Canned mushrooms, sliced, marinated/sauted in vegetable oil, 180/115g

6415712600129

Y

Yes, 6

128,520

0.8

can

1

L

13

kidney beans

7340011436829

Y

130,896

0.59

can

1

M

15

Mixed beans

7340011436867

Y

90,720

0.55

can

1

N

14

Kidney beans in chili sauce

7340011436836 7340011442271

Y

54,432

0.63

can

2

O

12

brown beans 420g/240g

7340011364214

Y

6,480

0.51

can

1

P

16

Brown beans, 420g

6415719415368

Y

250,000

0.53

can

1

Š 2016 Dragon Sourcing. All rights reserved.

Y

7

Specs same as H

Specs same as D

11 references of canned mushrooms (12 specs)...

A

B

C

D

E

6415712600129

6415712600655

7340011341789

7340011432432

7340011432449

Mushroom Whole can

mushroom slices can

mushroom Sliced in marinade can

G 7340011351146 Mushroom slices 2nd choice glass jar

mushroom whole can

H 7340011340294 mushrooms pieces & stems, can

X-tra mushrooms whole can

mushroom Pieces & Stems can

I

J

K

6415712600235

7340011438885

7340011351139

mushroom whole small can

mushrooms Pieces & stems glass jar

(= H) Packaging glass Jarr

Š 2016 Dragon Sourcing. All rights reserved.

F 6415719429914 6415719429907

8

Fakta mushrooms Pieces & stems glass jar

(= H) Packaging glass Jarr

Mushroom whole glass jar

( = D) Packaging glass Jar

...and 5 references of canned beans L

M

7340011436829

7340011436867

canned Kidney beans

Canned Bean Mix

Š 2016 Dragon Sourcing. All rights reserved.

N 7340011436836 7340011442271 canned Kidney beans in chilli

O

P

7340011364214

6415719415368

Canned Brown beans

canned brown beans

9

then an extensive supplier data base is built leveraging multiple sources of information Sources of Information - China

Company and contact information

No.

Product category

Supplier name

Province

1

Mushrooms

Supplier 1

Fujian

2

Mushrooms

Supplier 2

Hubei

3

Mushrooms

Supplier 3

Fujian

4

Mushrooms

Supplier 4

Fujian

5

Mushrooms

Supplier 5

Fujian

Š 2016 Dragon Sourcing. All rights reserved.

City

Website

Source

Contact Person

Email

10

Telephone

Mobile

Website name

websites

Remark B2B for all over the world Alibaba www.alibaba.com Global www.globalsources. B2B for all over Sources com the world www.gongchang.co B2B for all over Gongchang m the world B2B for all over Tradekey www1.tradekey.com the world B2B for all over ECVV www.ecvv.com the world B2B for all over www.ec21.com the world EC21 B2B for all over Hellotrade www.hellotrade.com the world Trade Asia www.etradeasia.com B2B for Asia Asian www.asianproducts.

Products com B2B for Asia made in www.made-inchina.com BSB for China china Alibaba china.alibaba.com BSB for China China BSB for China CHINA.CN www.china.cn China Chamber of Commerce for electrical & mechanical CCCME www.cccme.org.cn products TOP 1 source www.baidu.com engine in China Baidu

Next step is to administer the RFI/RFQ process

Company Profile

Production Capacity

Contact detail information Quality and certificate

Š 2014 Dragon Sourcing. All rights reserved.

11

During the RFI/RFQ process, an RFI/RFQ control sheet is used to follow up the whole process Company and contact information

RFI/RFQ Process follow up RFI/RFQ sent

Product category

Supplier name

Province

Mushrooms

Supplier 1

Fujian

Mushrooms

Supplier 2

Hubei

Mushrooms

Supplier 3

Fujian

Mushrooms

Supplier 4

Fujian

Mushrooms

Supplier 5

Fujian

Y/N

© 2014 Dragon Sourcing. All rights reserved.

Date

Intend to respond Y/N

If no, reason

Last call follow up Date

12

Comment

RFI received Y/N

Date

If no, reason

RFQ received Y/N

Date

If no, reason

Based on the RFI/RFQ, company profiles are developed - Company and business information GENERAL INFORMATION Company Name

Total # employees

200

Customers

Industry

Country

% total turnover

Good English speakers (Y/N, #)

2

MARUHA NICHIRO

Canned mushroom

JAPAN

20

S.ISHIMITSU

Canned mushroom

JAPAN

10

SUN YIK FOOD

Canned mushroom

CHINA

10

CANEAST FOOD

Canned mushroom

CANADA

5

PAK SHINE

Canned mushroom

CHINA

5

Supplier 1

Address

TOP 5 CUSTOMER – CANNED MUSHROOMS

HUMAN RESSOURCES

N/A

Town

Chengxi

Zip code

363112

Production

Province

Fujian

56

Country

China

Company Website

N/A

CONTACT INFORMATION Contact Person Title

N/A Trading manager

Email

N/A

Tel

N/A

Fax

N/A

Mobile phone

N/A

Found Year

2009

Nationality

China

Production location

Fujian

Ownership

Private

Capital in USD

7 Million

Work floor size (m²)

533,360

License for self import/export (Y/N) Years of export experience Deliver to retailers in Europe (Y/N)

30 years

Yes 30 years Yes

EUR retailers suppliedAll rights Yes ©Current 2016 Dragon Sourcing. reserved.

R&D

Admin

15 10 19 TURNOVER IN USD 2010 2011 2012 2013 10,000,000 15,000,000 16,000,000 20,000,000 % SALES EXPORT TO MAIN MARKETS IN 2013 EU (%) US (%) Others (%) Total (%) export 25% 5% 60% 90% MAIN CUSTOMERS Industry Product category

Country

Percentage of sales

MARUHA NICHIRO CORPORATION

canned mushroom/lychee

JAPAN

15%

S.ISHIMITSU & CO., LTD.

canned mushroom/bamboo shoot

JAPAN

10%

LOVERING FOODS LTD

water chestnut

UK

10%

SUN YIK FOOD LTD. CANEAST FOOD

mixed mushroom mushroom

HK,CHINA CANADA

5% 5%

Customers

BUSINESS INFORMATION

Years in canned food business

Quality

EXPERIENCE - CANNED BEANS AND MUSHROOMS Canned Mushrooms

PRODUCT CATEGORY YEAR

Canned Beans

2012

2013

2012

2013

% of total sales revenue

60

60

60

60

% exportation

100

100

100

100

TOP 5 CUSTOMER – CANNED BEANS Customers

Industry

Country

% total turnover

TIGER

Canned bean

SOUTH AFRICA

25

ETECO

Canned bean

NIGERIA

20

LOVERING

Canned bean

UK

10

ALMA

Canned bean

LEBANON

5

PT

Canned bean

INDONESIA

5

TOP 5 MANUFACTURED PRODUCTS Product name

Yearly Volume produced 2013

MUSHROOM

10,000

Exporting to Europe

Yes

Yes

LYCHEE

2,000

Deliver to lead retailers in Europe

Yes

No

BAMBOO SHOOT

1,500

13

MUNG BEAN

Based on the RFI/RFQ, company profiles are developed - Production PRODUCTION PROCESS

PRODUCTION CAPACITY Max. prod. capacity 2013 (tons)

Volume 2013 (tons) Canned Mushrooms

8,000

Canned Beans

1,500

Equipment name blanching machine Vacuum machine Grading machine can washing machine metal detector shaking screen hair removal machine

Can origin Can Material composition Ability to customize outer can printing Able to analyze tin (Sn) content in finished goods

% occupatio n 2013

12,000

67%

EQUIPMENT 2,000

8,000

75%

Production process Washing raw ingredient process Steeping process Production process

1,000

Brand/ country

2010 2014 2010 2010 2010 2010 PACKAGING 2010

CHINA CHINA CHINA CHINA CHINA CHINA PROCESS CHINA

2PCS 1PCS 2PCS 2PCS 4PCS 4PCS 4PCS

From the cans' factory

Produce shelf ready packaging

No

Tinplate

Use Slipsheet for shipment

Yes

Raw Material Water

Yes

Yes

Familiar with slip sheet use

Able to analyze Heavy Secondary metalDragon (Cd, Pb)Sourcing. and Š 2016 All rights Yesreserved. packaging usually

Yes

We pack with label

14

N/A

washing in sink with water

washing in sink with water

steep in special bucket

steep in special bucket

precook in pot

precook in pot cooling with water

wipe dry the tin

wipe dry the tin

pack with label and carton

pack with label and carton

3 years

3 years

China

China

Quality control incoming materials

Checking by QC deparment

Checking by QC deparment

Ensure products do not contain GMO

have GMO test

have GMO test

QC of the water used for production

Testing in regular

Testing in regular

Use chlorinated water in prod. Process

No

Yes

Is the waste water treated?

Yes

Yes

Main raw ingredients origin

Secondary Packaging

N/A

cooling with water

Shelf life of the finished good

Raw Material Food

Canned Beans

Cooling process Final washing process

Main characteristics

Canned Mushrooms

Cooking process

Packaging process

Year purchase d

Primary Packaging

Planned prod. capacity 2014 (tons)

Based on the RFI/RFQ, company profiles are developed - Quality Management QUALITY PROCESSES

QUALITY CERTIFICATION Date of Certificate

Certifying Organization

IFS

2014.02.12

ECOCERT FRANCE SAS

BRC

2014.01.10

MICRON 2 LTD

HALAL

2014.04.15

SHANDONG ISLAMIC ASSOCIATION CHINA

2014.01.20

CHINA QUALITY CERTIFICATION CENTER

Certificate Name

HACCP Product manufactured and controlled in accordance with...

Y/N

Comment

Relevant EU Regulation

Yes

N/A

Allergen Documentation (EU regulation 1169/2011, annex II

Yes

N/A

Y/N

Process description

Incoming material quality inspection - raw ingredient

Yes

test shape, colour, foreign body, pesticide residues

Incoming material quality inspection – pckg material

Yes

test the layout,size,color texture

In-process quality inspection

Yes

test the goods every day

Finished goods quality inspection

Yes

test the goods based on requirement

Process for supplier selection

Yes

N/A

Process for supplier evaluation

Yes

N/A

Long term contracts with your suppliers

Yes

N/A

Performance achieved in out-going quality (% rejected)

Yes

Results of pesticides in accordance with Regulation (EC) No.396/2005 of EU Parliament

Yes

N/A

HACCP (Codex Alimentarius)

N/A

N/A

N/A

Data available upon request

N/A N/A N/A N/A

© 2016 Dragon Sourcing. All rights reserved.

Yes

Measures in place for record tracking

using the relevent sheet to record t

Handling and treatment of solid waste

signed the dealing contract

Handling and treatment of liquid waste

treat the liquid waste into disposal

IN-HOUSE QUALITY CONTROL EQUIPMENT

X-ray machine

Yes, customers order number - find packaging lot - date, specification, quantity validation effect

Traceability measure

Heavy metal Commission regulation (EC) No 1881/2006 of 19 Dec 20166 setting max levels off contaminants

Metal detector

3%

CORPORATE & SOCIAL RESPONSIBILITY Implemented BSCI - (Business Social compliance initiative)

Yes

Working hours/week excl. OT

Adhere to all rules and regulations in respect to child labor (Y/N)

Yes

Max. no of working hours/week

48

Adhere to all rules and regulations in respect to environmental issues (Y/N)

Yes

Personal attendance records for all workers

Yes

15

8-10 hrs

…and factory pictures collected FACTORY PICTURES & PRODUCTS

© 2016 Dragon Sourcing. All rights reserved.

16

The RFI responses are analyzed using a score card validated by the client Supplier 1 Mushrooms and beans Business information

Weight of criteria

Scoring

Max Score per criteria

Year Founded

5%

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

Registered capital in USD

5%

1=Less than 100,000 2=100,000 - 500,000 3=500,000 -1M 4= >1M

4

1=Less than 1M 2=Between 1 to 3M 3=Between 3 to 5M 4=More than 5M

4

Turnover in 2013 in USD

7%

5

Weight of the section

Score

Production

Weight of criteria

Scoring

Max Score per criteria

Weight of the section

Score

Supplier's answer

Supplier's answer

Company Profile

Monthly production capacity

10%

0= 0-9 Tons 1 = 10-100 Tons 2 = 101-200 Tons 3 = 201-999 Tons 4 = 1000-1500 Tons 5 =.> 1500 Tons

Production

5%

1 = produce only bean or only mushrroms 2 = product beans AND Mushrooms

2

Production equipment

5%

0 = not listed 1 = listed

1

Maintenance program

5%

0 = don't have 1 = have

1

Production process description

5%

0 = not desribed 1 = described but incomplete 2 = Yes, clearly described

2

Control raw materials FOOD

5%

0 = not desribed 1 = described but incomplete 2 = Yes, clearly described

2

Control raw materials WATER

5%

0 = not desribed 1 = described but incomplete 2 = Yes, clearly described

2

Control raw materials PACKAGING CAN

5%

0 = not desribed 1 = described but incomplete 2 = Yes, clearly described

2

Product shelf life

5%

0 = not given 1 = 1-2 Y 2 = > 2Y

2

Able to provide shelf ready packaging

25%

0 = no 1 = Yes

1

Able to pack using slip sheets

25%

0 = no 1 = yes ready to do it 2 = yes, ability and experience to do it

2

5

2

Workfloor area

5%

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

4

No. of employee

3%

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

5

English speaking employees

2%

0 = don't have 1 = have

1

Export experience

15%

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

3

1=Less than 5 years 2=5-10 years 3=More than 10 years

3

0=Not provided 1=Local customers 2=National customers 3=International customers 4= Lead European retailers customers

4

Number of years in the canned food business

10%

Profile of Top Customers

20%

Canned food place in their core business % of their total revenue

5%

0 = < 5% 1 = 5% - 20% 2 = 20% - 50% 3 = >50%

3

Canned Food export experience

15%

0 = not export 1 = export but not to Europe 2 = export and to Europe

2

Manufacturer or retailer

10%

0 = retailer 1 = Manufacturer

1

Subtotal

102%

Š 2016 Dragon Sourcing. All rights reserved.

10%

10%

0

Subtotal

17

100%

Production Capacity

30%

30%

0

The RFI responses are analyzed using a score card validated by the client Quality system

Weight of criteria

Scoring

Max Score per Weight of criteria the section

Score

Supplier's answer

Social responsibility

Weight of criteria

Scoring

Max Score per criteria

ISO 9001

10%

0= No 1= Yes

1

BSCI implemented

40%

0= No 1= Yes

1

ISO 14001

10%

0= No 1= Yes

1

30%

0= No 1= Yes

1

7%

0= No 1= Yes

Adhere to all rules and regulations in respect to child labor

1

Adhere to all rules and regulations in respect to health and safety

30%

0= No 1= Yes

1

Subtotal

100%

Others

5%

0= No 1= Yes

Allergen Documentation EU regulation 1169/2011, annex II

10%

0= No 1= Yes

1

Heavy metal Commission regulation

5%

0= No 1= Yes

1

Relevant EU Regulation

Results of pesticides in accordance with regulations HACCP (Codex Alimentarius)

5%

5%

0= No 1= Yes

0= No 1= Yes

1

Quality and certificate

RFI products capacity

1

1 25%

In house test equipment

Quality control process

Supplier management process

Tracability

Waste management

Subtotal

8%

20%

5%

5%

5%

0= No 1= 1-3 test equipment 2= >3 test equipment 0= No 1= Yes to 1 2 = Yes to 2 3 = Yes > 2

0= No 1= Yes

0= No 1= Yes

0= No 1= Yes

100%

Š 2016 Dragon Sourcing. All rights reserved.

1

Score

5% Social

Weight of criteria

5% Scoring

Weight of Max Score per the criteria section

Able to produce Mushrooms specifications given

25%

0 = No 1 = Yes, partly 2 = Yes, all of mushrooms

2

Able to produce Beans specifications given

25%

0 = No 1 = Yes, partly 2 = Yes, all of beans

2

For products they can offer - ability to meet the demand

30%

0 = No 1 = Yes but not for all 2 = Yes, no issue

2

Ability to meet requirements specifications

10%

0 = No answer 1 = Answer and understand (with Questions possibly)

1

Ability to read/understand and meet additional quality requirements in appendix

10%

0 = No answer 1 = Answer and understand (with Questions possibly)

1

Subtotal

100%

Cooperation

Weight of criteria

Scoring

Max Score per criteria

1 Cooperation during RFI

50%

1= Poor 2= Satisfactory 3= Excellent

3

Completeness of RFI

50%

1= Poor 2= Satisfactory 3= Excellent

3

0 Score

0

Subtotal

18

100%

Supplier's answer

RFI products 25% capability

25%

0

Weight of the section

Score

Cooperation 5%

1

25%

Supplier's answer

responsibility

2

2

Weight of the section

5%

0

Supplier's answer

For this case: 14 suppliers who replied the RFI were scored and ranked Supplier score out of 100

100 90

87

87

84

80

81

79

78

76

74

72

71

70 60

60 47

50 40

35

30 20 11 10 0

Š 2016 Dragon Sourcing. All rights reserved.

19

CN

IN

TH

TR

Average scoring for 14 suppliers reaches 67 out or 100. 10 suppliers were above this score, 4 from India and Thailand are below

Cooperation

Supplier score out of 100 by section breakdown

RFI products capacity Social responsibility

10 suppliers scoring above average

100

Quality system Production

90

Business information

80

Average 67.2

70

60

50

40

30

20

10

0

CN1.

Supplier 1

CN2.

Supplier 2

CN3.

Supplier 3

Š 2016 Dragon Sourcing. All rights reserved.

TR1.

Supplier 4

CN4.

Supplier 5

CN5.

Supplier 6

CN6.

Supplier 7

20

TR2.

Supplier 8

CN7.

Supplier 9

CN8.

Supplier 10

IN1.

Supplier 11

IN2.

Supplier 12

TH1.

Supplier 13

TH2.

Supplier 14

Based on scoring results, we recommended to go further with TOP 10 suppliers for RFQ • • •

Based on scoring results, Indian and Thailand suppliers have very little experience exporting. They do not meet the requirements in order to be considered as a potential supplier for client Trading products. Nevertheless, for benchmarking, we would suggest to ask them for quotation in the next step We recommend to go further with TOP 10 suppliers who obtained a score above average Suggested Next steps : 1. Request for Quotation 2. Request for samples 3. On-site visit/ On-site Audit

Rank

Section

Business info

Prod

QMS

Social resp.

RFI cap.

Cooper.

Total

Section weight

10%

30%

25%

5%

25%

5%

100%

1

CN1. Supplier 1

9.0

19.8

24.0

5.0

25.0

4.2

86.9

2

CN2. Supplier 2

5.8

22.5

25.0

5.0

25.0

3.3

86.6

3

CN3. Supplier 3

7.6

20.4

22.5

5.0

25.0

3.3

83.8

4

TR1. Supplier 4

9.4

22.8

21.3

5.0

18.8

3.3

80.5

5

CN4. Supplier 5

7.2

26.6

21.8

5.0

15.6

2.5

78.6

6

CN5. Supplier 6

6.1

28.7

21.5

5.0

13.1

3.3

77.7

7

CN6. Supplier 7

7.2

20.1

21.8

5.0

18.1

4.2

76.4

8

TR2. Supplier 8

7.1

28.1

20.3

3.0

11.9

3.3

73.6

9

CN7. Supplier 9

8.9

17.7

25.0

5.0

11.9

3.3

71.8

10

CN8. Supplier 10

8.1

9.6

25.0

3.0

22.5

2.5

70.7

11

IN1. Supplier 11

4.9

7.5

15.3

3.0

25.0

4.2

59.8

12

IN2. Supplier 12

2.7

5.3

11.3

3.0

22.5

2.5

47.2

13

TH1. Supplier 13

5.3

11.3

0.0

0.0

16.3

2.5

35.3

Suppliers do not match client sourcing criteria Poor scoring results Little export experience and limited capacity

14

TH2. Supplier 14

2.1

1.5

0.0

0.0

6.3

1.7

11.5

We suggest to include them in RFQ step for reference

6.5

17.3

18.2

3.7

18.3

3.2

67.2

Average

© 2016 Dragon Sourcing. All rights reserved.

21

Potential suppliers We Recommend to move forward for RFQ with TOP 10 Suppliers 1. RFQ 2. Samples 3. On-site Audit

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

© 2016 Dragon Sourcing. All rights reserved.

•

Conclusions

•

Appendix : suppliers location

22

Based on scoring results, we recommended to go further with TOP 10 suppliers Rank 1

Section

Score out of 100 (RFI)

Mushroom s (Y/N)

86.9

Y

CN1. Supplier 1

Bean s (Y/N)

Quoted RFQ filled in Yes Mushrooms 11/11 No - Out of season, not available to provide an estimated quote as this is their first time to make the product.

2

CN2. Supplier 2

86.6

3

CN3. Supplier 3

83.8

No - Out of season, not willing to take time to provide an estimated quote upon on previous season price.

4

TR1. Supplier 4

80.5

No - Not able to quote at the moment as they hold suspended production for private label.

5

CN4. Supplier 5

78.6

6

CN5. Supplier 6

77.7

7

CN6. Supplier 7

76.4

Y

Yes Mushrooms 11/11

8

TR2. Supplier 8

73.6

Y

Yes Mushrooms 3/11

9

CN7. Supplier 9 CN8. Supplier

Š 201610 Dragon Sourcing. All rights reserved.

Y

Yes Mushrooms 8/11 Y

Yes Beans 5/5

No - Out of season, not available to provide an estimated quote as this is their first time to make the product.

71.8

70.7

Y

23

Yes Beans 3/5

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

•

© 2016 Dragon Sourcing. All rights reserved.

Results

24

4 suppliers submitted their quotation for Mushrooms, 3 from China and 1 from Turkey MUSHROOMS Products Quotations received (USD/can FOB) VS Current price $0,0025

Quotation (FOB USD/can)

$0,0020

$0,0015

$0,0010

$0,0005

$0,0000

Mushroom reference

Current Price

© 2016 Dragon Sourcing. All rights reserved.

Haishan Supplier(CN) 1 (CN)

Shipuller Supplier(CN) 7 (CN)

25

Lixing (CN) Supplier 5 (CN)

Ersanlar Supplier(TR) 8 (TR)

Most quotation are below current prices (23/33). By combining different suppliers, all items have potential savings

Ref

6415712600129

mushroom Sliced in marinade can

Product

Annual Volume (#Cans)

64157126006 55

73400113417 89

73400114324 32

73400114324 49

64157194299 14 64157194299 07

73400113511 46

73400113402 94

64157126002 35

734001143888 5

mushroom whole can

mushrooms whole can

Mushroom Whole can

mushroom slices can

mushroom Pieces & Stems can

Mushroom slices 2 choice glass jar

mushrooms pieces & stems,can

mushroom whole small can

mushrooms Mushroom Pieces & stems whole glass glass jar jar

73400113511 39

128,000

135,000

18,500

42,000

164,640

426,384

76,923

156,000

151,000

746,000

46,000

$102,400

$141,750

$13,228

$85,260

$218,971

$277,150

$46,154

$67,080

$105,700

$387,920

$35,880

Current Price Curent spend (Qtity * CP) Supplier 1 (CN)

1

$0.450

$0.900

$0.900

$0.500

$0.420

0.38

$0.600

$0.380

$0.500

$0.550

$0.700

Supplier 7 (CN)

7

$0.310

$0.790

$0.820

$0.520

$0.310

$0.350

$0.600

$0.350

$0.520

$0.550

$0.630

Supplier 5(CN)

5

$0.692

$0.371

$0.317

$0.288

$0.483

$0.288

$0.458

$0.600

Supplier 8 (TR)

8

$1.200

$1.200

Minimum price quoted

$1.200 $

Percentage price difference Max potential saving/items

0.3100

$ 0.7900

-61% $

62,720

$ 0.6920 -25%

$ 35,100

Š 2016 Dragon Sourcing. All rights reserved.

$ 0.3710 -3%

$ 426

$ 0.3100 -82%

$ 69,678

$ 0.2880 -77%

$ 167,933

26

$ 0.4830 -56%

$ 154,351

$ 0.2880 -20%

$ 9,000

$ 0.5000 -33%

$ 22,152

$ 0.4580 -29%

$ 30,200

$ 0.6000 -12%

$ 46,252

-23% $ 8,280

The Turkish supplier is not competitive. Chinese supplier 7 has the highest potential savings (USD 504k) while max potential savings with combined suppliers would reach USD 606K. Potential savings per supplier $700.000 $606.091 $600.000 $503.648 $476.919

$500.000 $435.936 $400.000

$300.000

$200.000

$100.000 $0 $0

Supplier 8 (TR)

Ersanlar (TR)

Supplier 1 (CN)

Haishan (CN)

Supplier 5 (CN)

Lixing (CN)

Supplier 7 (CN) Shipuller (CN)

COMBINED SUPPLIERS

Items with savings / items quoted

0/3

8/11

8/8

8/11

ALL 11

Total % savings %

0%

29%

32%

34%

41%

Š 2016 Dragon Sourcing. All rights reserved.

27

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

•

© 2016 Dragon Sourcing. All rights reserved.

Results

28

2 Chinese suppliers offered quotation for the beans references. All prices received are below current prices

BEANS Products Quotations received (USD/can FOB) VS Current price $0,7000

Quotation (FOB USD/can)

$0,6000 $0,5000 $0,4000

$0,383

$0,363 $0,329

$0,3000

$0,321

$0,317 $0,279 $0,200

$0,2000 $0,1000 $0,0000 Beans reference

Current Price Š 2016 Dragon Sourcing. All rights reserved.

Aolong Supplier 10 29

Qugu Supplier 6

$0,200

Supplier 6 quoted all 5 references with lower price than current price. Their quotation is the most attractive with 53% potential savings on total spend value (USD 157K over USD 297K)

Ref

Product

Annual Volume Current Price (#Cans)

Supplier 10 Rank 10

Curent spend (Qtity * CP)

Supplier 6 Rank 6

COMBINED SUPPLIERS

Quote

Potential Savings

Quote

Potential Savings

$0.383

($27,117.000)

$0.329

($34,191.000)

$34,191.000

Potential savings

7340011436829 canned Kidney beans

131,000

$77,290

7340011436867 Canned Bean Mix

91,000

$50,050

$0.279

($24,661.000)

$24,661.000

7340011436836 Kidney beans in chilli 7340011442271

54,500

$34,335

$0.363

($14,551.500)

$14,551.500

7340011364214 Canned Brown beans

6,500

$3,315

$0.317

($1,254.500)

$0.200

($2,015.000)

$2,015.000

6415719415368 canned brown beans

250,000

$132,500

$0.321

($52,250.000)

$0.200

($82,500.000)

$82,500.000

current spend

$297,490

Š 2016 Dragon Sourcing. All rights reserved.

# items below current price

3

5

5

total potential savings

$80,622

$157,919

$ 157,919

Total % savings

27%

53%

53%

30

Consequently, Supplier 6 has the best offer, however Supplier 10 also offers potential savings

Beans : Potential savings per supplier $180.000

$160.000

$157.919

$157.919

Supplier Qugu 6

COMBINED SUPPLIERS

$140.000

$120.000

$100.000 $80.622

$80.000

$60.000

$40.000

$20.000

$0

Supplier Aolong 10

Qugu is less expensive on all items Š 2016 Dragon Sourcing. All rights reserved.

31

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

© 2016 Dragon Sourcing. All rights reserved.

•

Results

•

Appendix : suppliers location

32

7 Chinese suppliers were selected for auditing and sampling •

For Mushrooms: – 3 Chinese suppliers (Supplier 1, Supplier 5, Supplier 7) offer potential savings and have a high RFI ranking – The Turkish supplier Supplier 8 is far from being competitive and is probably not worth going further – +1 Chinese supplier (Supplier 3) who has a very high RFI ranking (No.2) but is only willing to quote when the product is “in season”

•

For Beans: – Supplier 6 and Supplier 10 are good potential suppliers with high score and attractive savings possibilities – +1 Chinese supplier (Supplier 2) who has a very high RFI ranking (No.3) but is only willing to quote when the product is “in season”

© 2016 Dragon Sourcing. All rights reserved.

33

Agenda

1.

Introduction

2.

Sourcing Approach



RFI step



RFQ step

- Mushrooms : Quotations & potential savings - Beans : Quotations & potential savings

© 2016 Dragon Sourcing. All rights reserved.

•

Results

•

Appendix : suppliers location

34

8 suppliers in China submitted RFI for FOOD category No.

Supplier

Province

CN1

Supplier 1

Fujian

CN2

Supplier 2

Hubei

CN3

Supplier 3

Fujian

CN4

Supplier 5

Fujian

CN5

Supplier 6

Fujian

CN6

Supplier 7

Beijing

CN7

Supplier 9

Liaoning

CN8

Supplier 10

Hubei

Heilongjiang

Jilin Liaoning Xinjiang Heb ei Shanxi Shandong

Ningxia Qinghai

BEIJING

Neimongu

Gansu

Gansu

Xizang

Shaa nxi

CHONGQING Hunan Guizhou Guangxi

Shanghai / DS

Anhui Hubei

Sichuan

Yunan

Jiangsu

Henan

Zhejiang Jian gxi

Guangdong

Hong Kong

© 2016 Dragon Sourcing. All rights reserved.

35

Fujian

Taiwan

2 suppliers in India submitted RFI for FOOD category No.

Supplier name

IN1

Supplier 11 (manufacture)

IN2

Supplier 12 (manufacture)

IN3

Supplier 15 (trader) Supplier filled in contact info but not full RFI

Province Uttarakhand

Punjab Uttarakhand

Tamil Nadu

Š 2016 Dragon Sourcing. All rights reserved.

36

2 suppliers in Thailand submitted RFI for FOOD category No.

Supplier name

Province

TH1

Supplier 13

Chiang mai

TH2

Supplier 14

Bangkok

1

2

Š 2016 Dragon Sourcing. All rights reserved.

37

2 suppliers in Turkey submitted RFI for FOOD category No.

Supplier name

Province

TR1

Supplier 4

Izmir

TR2

Supplier 8

Antalya

1

2

Š 2016 Dragon Sourcing. All rights reserved.

38