Case study-Multiple categories sourcing project review

Dragon Sourcing - 龙 源 Your Tailored Sourcing Approach to LCC Sourcing

Case Study: Multiple Categories Sourcing Project Review, Shanghai, Oct. 25th 2013

Time schedule for all categories -The time schedule is finalized according to the last conference call on 30-Sep.

No.

Category

1

Engineering service

W1

W2

W3

W4

W5

W6

W7

W8

2

Construction service

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10

W11 W12 W13

W14

W15

W16

W17

3

Pipelines

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10

W11

W12

W13

W14 W15

4

Tank

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10

W11

5

Automation

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10

W11

W5

W6

W7

W8

W9

W10

W11

W12

W13

W14

W15

W16

W17

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10

W11

W12

W13 W14

W1

W2

W3

W4

W5

W6

W7

W8

W9

W10 W11 W12

22-Jul 29-Jul 5-Aug 12-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep 7-Oct 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec 9-Dec

UtilitiesElectrical parts

W1

W2

W3

W4

W18 W19

6

UtilitiesMechanical parts 7

Part of production line

Today Process before audit © 2013 Dragon Sourcing. All rights reserved.

Finalized audit week 2

National Holiday

Introduction of DS team for this project Richard Laub DS CEO

Olivier Levy DS Managing Director

Vivian Xu client Account Manager

Capex

Cardboard Packaging

Burke Gu Buying Analyst

Sara Deng Category Buying Engineering

William Gu Category Buying Engineer

Vivian Xu client Account Manager

Vivian Xu client Account Manager

Š 2013 Dragon Sourcing. All rights reserved.

3

In charge of utilities mechanical, electrical and automation In charge of pipelines and tank

In charge of construction service and part of production line

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- On going

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

4

Time schedule for engineering service -The whole process is on schedule, 6 suppliers visited by client with DS Steps

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to include in the RFI process

3

Develop the RFI – jointly with client – to include all key supplier qualification criteria (e.g.: financial, related experience , company certificate, CV of the main persons of the project)

4

Administration and chasing for completion of an NDA with suppliers that have been preselected

5

Administer the RFI process to ensure as high a return rate as

6

Analyze responses based on qualitative criteria and using a balance score card and recommend suppliers which client needs to take through a formal qualification process

7

Carry out interview with pre-selected suppliers. 3 options exist: • Option 1: Dragon Sourcing carries out qualification interview • Option 2: client carries out qualification interview • Option 3: Dragon Sourcing carries out initial qualification process followed by client interview with suppliers recommended by Dragon Sourcing

8

Support contract negotiations between client and qualified suppliers

W1 22-Jul

W2 29-Jul

W3 5-Aug

W4 12-Aug

W5 19-Aug

W6 26-Aug

W7 2-Sep

W8 9-Sep

Today © 2013 Dragon Sourcing. All rights reserved.

5

Process before audit

Audit week

Milestones

Indentified suppliers’ status for engineering service 6 suppliers were visited from Sep.4th to Sep.11th Number of suppliers initially identified 25

Supplier indentified

Number of suppliers NDA sent 25 NDA sent

Number of suppliers signed 15

RFI sent

Number of suppliers RFI sent 15

Intend to respond

Number of suppliers intend to respond 14

RFI received

Selected for interview

Number of suppliers internal checking 2

Number of suppliers intend to sign 0

Number of suppliers decline to respond 1

Number of suppliers RFI received 14

Number of suppliers strong recommend to interview 4

Number of suppliers can be interviewed 6

Number of suppliers finally select to interview 6 Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

6

Number of supplier decline to sign 8

-2 suppliers don’t agree the items in the NDA -2 supplier think the NDA is too complicated, -4 suppliers give up the project finally

Score card analysis for engineering service company after adjusted by client

#

Country

Supplier Name

Company Background

Project Company Cooperation related Qualification

Total

Rank by client adjusted score card

Rank by original score card

1

1

1

Local

Supplier 1

30

39

17

10

max score 100 96

2

Foreign

Suppleir 2

29

37

15

10

91

2

2

3

Local

Suppleir 3

22

36

14

10

82

3

3

4

Foreign

Suppleir 4

27

28

13

10

78

4

4

5

Foreign

Suppleir 5

19

32

16

9

75

5

5

6

Foreign

Suppleir 6

16

37

12

10

75

5

6

7

Foreign

Suppleir 7

19

37

9

10

75

5

6

8

Foreign

Suppleir 8

26

35

4

9

73

6

6

9

Foreign

Suppleir 9

19

34

8

10

71

7

7

10

Foreign

Suppleir 10

20

37

6

7

70

8

9

11

Foreign

Suppleir 11

30

22

6

9

67

9

9

12

Foreign

Suppleir 12

13

35

9

10

67

9

10

13

Local

Suppleir 13

26

20

13

7

65

10

8

14

Foreign

Suppleir 14

19

22

6

10

57

11

13

15

Local

Suppleir 15

19

27

3

7

56

12

12

16

Foreign

Suppleir 16

22

20

7

7

55

13

11

17

Local

Suppleir 17

19

21

7

4

50

14

14

18

Local

Suppleir 18

15

13

8

7

42

15

15

19

Foreign

Suppleir 19

13

12

5

5

34

16

16

Average

67

30%

40%

20%

10%

Š 2013 Dragon Sourcing. All rights reserved.

7

5 suppliers client already interviewed before the project 6 suppliers client visited with DS

Audit results for 6 engineering service suppliers Date

Time Morning

4-Sep-13 Afternoon Morning 5-Sep-13 Afternoon

Morning 6-Sep-13 Afternoon

Supplier to be visited xxx (Rank No.8)

Visit project site

xxx (Rank No.10)

Visit supplier office and do interview

xxx (Rank No.5)

Visit supplier office and do interview

Morning 9-Sep-13 Afternoon Morning 10-Sep-13 Afternoon 11-Sep-13

Morning

Recommended level after audit

Agenda

Attendee

Visit supplier office and do interview XXX

Visit project site

Visit project site Visit supplier office and do interview

xxx (Rank No.13)

xxx (Rank No.14)

xxx (Rank No.1)

Afternoon

Š 2013 Dragon Sourcing. All rights reserved.

XXX Visit project site Visit supplier office and do interview Visit project site) Visit supplier office and do interview Visit project site

8

XXX

Immediate next steps

Actions 1.

Responsible

Deadline

client/DS

11-Oct

client will inform DS the audit results for the engineering service and DS will prepare thank you lettter to the suppliers who have not been selected

Š 2013 Dragon Sourcing. All rights reserved.

9

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- On going

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

10

Time schedule for construction service -Next week we will contact the supplier who declined the project before due to the location problem and continue the RFI administration and NDA process Steps

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers around Shanghai to include in the RFI process

3

Develop the RFI – jointly with client – to include all key supplier qualification criteria (e.g.: financial, related experience , company certificate, CV of the main persons of the project)

4

Administration and chasing for completion of an NDA with suppliers that have been preselected

5

Administer the RFI process to ensure as high a return rate as

6

Analyze responses based on qualitative criteria and using a balance score card and recommend suppliers which client needs to take through a formal qualification process

7

Carry out interview with pre-selected suppliers. 3 options exist: • Option 1: Dragon Sourcing carries out qualification interview • Option 2: client carries out qualification interview • Option 3: Dragon Sourcing carries out initial qualification process followed by client interview with suppliers recommended by Dragon Sourcing

W1 22Jul

W2 W3 29- 5Jul Aug

W4 12Aug

W5 19Aug

W6 26Aug

W7 W8 W9 W10 W11 W12 W13 W14 W15 W16 W17 W18 W19 W20 29- 16- 23- 30- 7-Oct 14- 21- 28- 4-Nov 11- 18- 25- 2-Dec Oct Oct Oct Nov Nov Nov Sep Sep Sep Sep Sep

N a t i o n a l H o l i d a y

Today © 2013 Dragon Sourcing. All rights reserved.

Process before audit

11

Original audit week

Days base approach

Milestones

Indentified suppliers’ status for construction service -6 RFIs are received so far including 2 EPCM company xxx and xxx

Supplier indentified

Number of suppliers initially identified EOCM company: 17

Number of suppliers initially identified Construction company: 34

Number of suppliers NDA sent 13

Number of suppliers pending to sent NDA 6

Number of suppliers decline the project 15

NDA sent

Number of suppliers signed 6

RFI sent

Intend to respond

RFI received

Number of suppliers intend to sign 0

Number of suppliers internal checking 1

Number of supplier decline to sign 6

Number of suppliers RFI sent 6

Number of suppliers RFI intend to respond 5

Number of suppliers RFI not intend to respond 1

Number of suppliers RFI received 5

Number of suppliers RFI received 2 (xxx , xxx)

Selected for interview

Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

Remark: Double check with these supplier if they are interested in the project

12

Score card analysis for construction service company -7 suppliers’ RFI are analyzed by score card, the average score is 76 points, 3 suppliers’ score are over 80 points, 1 supplier’s score is over 90 points

#

1 2 3 4 5 6 7

100 90 80 70 60 50 40 30 20 10 0

Country

Local Local Local Local Local foreign Local

Supplier Name

Company Background

Project related

Company Qualification

Cooperation

Total

30%

40%

20%

10%

max score 100

28 26 20 20 19 16 23

36 33 34 36 25 24 16

18 18 20 18 13 16 12

10 7 9 7 10 10 7

92 84 83 81 66 66 58

Average

76

Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7

Rank by score card 1 2 3 4 5 5 7

Remark: Supplier No.5 and No.6 are EPCM companies

92 84

© 2013 Dragon Sourcing. All rights reserved.

83

81 66

Cooperation

66

58

Company Qualification Project related Company Background Total

13

Suppliers recommend to interview according to the score card and filled RFI - 4 suppliers are recommended to the interview stage

Country

China

Supplier name

Xxx

City

Shanghai

Province

Shanghai

Score card ranking

Strength

weakness

1

-Good company capability -Big construction group in China -Has a lot of experience in food industry -Full certificate

-Has experience in Hangzhou but not in Xiaoshan

-English skill is not good

China

xxx

Hangzhou

Zhejiang

2

-Good company capability -Big construction group in China -Has a lot of experience in food industry -Full certificate

China

xxx

Qidong

Jiangsu

3

-Acceptable company capability -Full certificate -Good English skill

-Middle size construction company

4

-Acceptable company back ground -Full certificate -Has a lot of experience in food industry

-English skill is not good -Middle size construction company

China

xxx

Shanghai

Š 2013 Dragon Sourcing. All rights reserved.

Shanghai

14

Immediate next steps

Actions

Responsible

Deadline

1.

Re-contact the suppliers reject the project before and collect NDA and RFI

DS

14-Nov

2.

RFI analysis and recommend suppliers for audit

DS

22-Nov

3.

Finalize suppliers for aduit

client/DS

25-Nov

Š 2013 Dragon Sourcing. All rights reserved.

15

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- On going

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

16

Demand analysis Tube TT straight length 4m / DN 65

Tube TT curve 90° / DN 65

Tube TT tee standard / DN 65

Material: AISI 304, Weight: 56.95kg, Quantity: 800m

Material: AISI 304, Weight: 12.67kg, Quantity: 300pcs

Material: AISI 304, Weight: 18.41kg,Quantity: 150pcs

Tube TT straight length 4m / DN 150

Tube TT curve 90° / DN 150

Tube TT tee standard / DN 150b

Material: AISI 304, Weight: 27.57kg, Quantity: 800m

Material: AISI 304, Weight: 34.18kg, Quantity: 300pcs

Material: AISI 304, Weight: 48.38kg, Quantity: 150pcs

© 2013 Dragon Sourcing. All rights reserved.

17

Time schedule for pipelines

Next week we will push the suppliers who haven’t replied the RFI and provide the RFI analysis result by score card Steps

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to prescreening process

3

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client

4

Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out audits with pre-selected suppliers. 3 options exist: Option 1: Dragon Sourcing carries out qualification audits Option 2: client carries out qualification audits Option 3: Dragon Sourcing carries out initial qualification process followed by client audit with suppliers recommended by Dragon Sourcing

© 2013 Dragon Sourcing. All rights reserved.

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14 W15 12-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep 7-Oct 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov

N a t i o n a l H o l i d a y

Process before audit

18

Original audit week

Today

Current audit week

Milestones

Status of identified suppliers for pipelines -284 supplier identified initially, 90/284 suppliers go to pre-screening process, 36/90 suppliers who meet all criteria go to the RFI process, 14/36 suppliers have replied RFI Supplier indentified

Telphone screening

Number of suppliers initially identified 284 No. of suppliers successfully contacted 265

No. of suppliers not contacted yet 0

No. of suppliers unsuccessfully contacted 19

No. of suppliers go to pre-screening 90

No. of suppliers need to double check 6

No. of suppliers declined the project 169

No. of suppliers intend to respond 36

No. of suppliers not intend to respond 0

No. of suppliers need to further contact 0

No. of suppliers RFI received by DS 14

No. of suppliers RFI pending to receive 22

No. of suppliers RFI sent 36 RFI sent

NDA sent

RFQ sent

Selected for audit

Selected for sample

Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

19

Next Steps Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

1.

Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

31-Oct

2.

Administrate RFQ and NDA process

DS

11-Nov

3.

Analyze RFQ result and recommend suppliers for audit

DS

15-Nov

Š 2013 Dragon Sourcing. All rights reserved.

20

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- On going

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

21

Demand analysis Vessel 6.25 m³ with agitator

Vessel 12.5 m³ with agitator

Vessel 35 m³

No pictures

Material: AISI 304L/304, Weight: N/A, Height: 5,310mm, Out diameter: 2,110 mm , 2~10pcs Vessel 35 m³ with agitator

Material: AISI 304L/304, Weight: 5,500kg Height; 7,755mm, Out diameter: 3,000 mm, 2~10pcs © 2013 Dragon Sourcing. All rights reserved.

Material: AISI 304L/304, Weight: 2,700kg, Height; 5,635mm, Out diameter: 2,600 mm, 2~10pcs Vessel 120 m³

Material: AISI 304/304L, Weight: 12,000kg Height; 12,000mm, Out diameter: 3,800 mm, 2~10pcs 22

Material: AISI 304L/304, Weight: 4,500kg Height; 7,755mm, Out diameter: 3,000 mm, 2~10pcs

Time schedule for tank Pre-screening process has completed, next week we will start RFI administration process Steps

W1 W2 W3 16-Sep 23-Sep 30-Sep

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to pre-screening process

3

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client

4

Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out audits with pre-selected suppliers. 3 options exist: Option 1: Dragon Sourcing carries out qualification audits Option 2: client carries out qualification audits Option 3: Dragon Sourcing carries out initial qualification process followed by client audit with suppliers recommended by Dragon Sourcing

© 2013 Dragon Sourcing. All rights reserved.

Process before audit

W4 7-Oct

W5 14-Oct

W6 21-Oct

W7 28-Oct

W8 4-Nov

W9 W10 W11 11-Nov 18-Nov 25-Nov

N a t i o n a l H o l i d a y

Today 23

Original audit week

Current audit week

Milestones

Status of identified suppliers for tank -83 suppliers identified, 51/83 go to the pre-screening process, 39/83 suppliers are selected to the RFI process, 21/39 suppliers have replied RFI, 16/39 suppliers are pending to receive Supplier indentified

Telphone screening

Number of suppliers initially identified 83 No. of suppliers successfully contacted 78

No. of suppliers not contacted yet 0

No. of suppliers unsuccessfully contacted 5

No. of suppliers go to pre-screening 51

No. of suppliers need to double check 0

No. of suppliers eliminated 27

No. of suppliers RFI sent 39 RFI sent

Don’t produce what client need

No. of suppliers intend to respond 37

No. of suppliers not intend to respond 2

No. of suppliers RFI received by DS 21

No. of suppliers RFI pending to receive 16

NDA sent

RFQ sent

Selected for audit

Selected for sample

Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

24

Next Steps Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

1. Administrate RFI process

DS

31-Oct

2. Develop and finalize score card template

DS

31-Oct

3. Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

4-Nov

4. Administrate RFQ and NDA process

DS

15-Nov

5. Analyze RFQ result and recommend suppliers for audit

DS

20-Nov

Š 2013 Dragon Sourcing. All rights reserved.

25

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- On going

6. Utilities- On going 7. Part of production line-On going 8. Q & A

Š 2013 Dragon Sourcing. All rights reserved.

26

Time schedule for automation We will continue telephone pre-screening process next week and develop RFI template Steps

W1 W2 W3 16-Sep 23-Sep 30-Sep

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to pre-screening process

3

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client

4

Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out audits with pre-selected suppliers. 3 options exist: Option 1: Dragon Sourcing carries out qualification audits Option 2: client carries out qualification audits Option 3: Dragon Sourcing carries out initial qualification process followed by client audit with suppliers recommended by Dragon Sourcing

© 2013 Dragon Sourcing. All rights reserved.

Process before audit

W4 7-Oct

W5 14-Oct

W6 21-Oct

W7 28-Oct

W8 4-Nov

W9 W10 W11 11-Nov 18-Nov 25-Nov

N a t i o n a l H o l i d a y

Today 27

Original audit week

Current audit week

Milestones

Status of identified suppliers for automation -70 suppliers identified so far including the 13 utilities suppliers, 36/70 suppliers go to the pre-screening process Number of suppliers initially identified Utilities: 13 Automation: 57

Supplier indentified

Telphone screening

RFI sent

NDA sent

No. of suppliers successfully contacted Utilities: 13 Automation: 57

No. of suppliers not contacted yet 0

No. of suppliers unsuccessfully contacted 0

No. of suppliers go to pre-screening Utilities: 12 Automation: 25

No. of suppliers need to double check 0

No. of suppliers eliminated Utilities: 1 Automation: 32

Utilities: -7 suppliers only do electrical related -3 suppliers only do mechanical related -3 supplier do whole process Automation: -4 suppliers only do utilities related -3 suppliers do production or process related -17 suppliers do whole process

RFQ sent

Selected for audit

Selected for sample

Negotiate contract

© 2013 Dragon Sourcing. All rights reserved.

28

Next Steps Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

DS

31-Oct

client/DS

31-Oct

1.

Telephone pre-screening process

2.

Prepare RFI-RFQ template and validate RFI-RFQ template

3.

Administrate RFI process

DS

31-Oct

4.

Develop and finalize score card template

DS

5-Nov

5.

Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

7-Nov

6.

Administrate RFQ and NDA process

DS

15-Nov

7.

Analyze RFQ result and recommend suppliers for audit

DS

20-Nov

Š 2013 Dragon Sourcing. All rights reserved.

29

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- Not started yet

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

30

Demand analysis-utility (electrical parts) MV switchgear

LV switchboard

UPS

Diesel Generator

Š 2013 Dragon Sourcing. All rights reserved.

31

transformer

Time schedule for utilities-electrical parts Next week we will push the suppliers who haven’t replied the RFI and provide the RFI analysis result by score card Step s

W1

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to pre-screening process

3

4

W2

W3

W4

W5

W6

W13 W14 W15 111812-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep 7-Oct 14-Oct 21-Oct 28-Oct 4-Nov Nov Nov

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out audits with pre-selected suppliers. 3 options exist: Option 1: Dragon Sourcing carries out qualification audits Option 2: client carries out qualification audits Option 3: Dragon Sourcing carries out initial qualification process followed by client audit with suppliers recommended by Dragon Sourcing

W7

W8

W9

W10

W11

W12

W16 W17 25Nov 2-Dec

N a t i o n a l H o l i d a y

Today © 2013 Dragon Sourcing. All rights reserved.

Process before audit

32

Original audit week

Current audit week

Milestones

Status of identified suppliers for utilities-electrical parts -223 equipment suppliers and 23 installation suppliers initially identified, 64/223 equipments suppliers have been sent RFI, 37/64 suppliers replied RFI, 19/64 suppliers are pending to receive Number of suppliers initially identified Equipment: 223 Installation: 23

Supplier indentified

Telphone screening

No. of suppliers successfully contacted Equipment: 223 Installation:23

No. of suppliers not contacted yet 0

No. of suppliers unsuccessfully contacted 0

No. of suppliers go to pre-screening Equipment: 87 Installation:8

No. of suppliers need to double check Equipment: 0 Installation:6

No. of suppliers eliminated Equipment: 136 Installation:13

No. of suppliers RFI sent Equipment: 64 Installation: 8 RFI sent

No. of suppliers intend to respond 56

No. of suppliers not intend to respond 8

No. of suppliers RFI received by DS 37

No. of suppliers RFI pending to receive 19

No. of suppliers need to further contact 0

NDA sent

RFQ sent

Selected for audit

-These 37 suppliers are selected according to the results of the pre-screening process -18 suppliers belong to group 1: switchgear & switchboard & transformer suppliers -6 suppliers belong to group 2: UPS suppliers -13 suppliers belong to group 3: diesel generator suppliers

-8 suppliers belong to group 1: switchgear & switchboard & transformer suppliers -4 suppliers belong to group 2: UPS suppliers -7 suppliers belong to group 3: diesel generator suppliers

Selected for sample

Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

33

Next Steps-electrical parts Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

1.

Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

31-Oct

2.

Administrate RFQ and NDA process

DS

22-Nov

3.

Analyze RFQ result and recommend suppliers for audit

DS

26-Nov

Š 2013 Dragon Sourcing. All rights reserved.

34

Remarks

Demand analysis-utility (mechanical parts) Chiller

Cooling tower for chillers

-Chiller, (6/11°C) each 2,5 MW cooling capacity, watercooled, 3 pcs -Chiller, (-5/0°C) each 0,7 MW cooling capacity, watercooled, 2 pcs -Chiller, (-3/2°C) each 1,0 MW cooling capacity, warehouse, 2 ps

-(30/35°C), each 2 MW capacityfor chillers -8 pcs

Pumps for cold and hot water

Heat exchanger

-steam/hotwater (60/50°C) each 1,5 MW heating capacity -4 pcs -Total 40 pcs © 2013 Dragon Sourcing. All rights reserved.

35

AHU

-airflow 50.000 m3/h -30 pcs

Compressed air and dryer

-compressors (8 bar) aircooled, each 30 m3/min capacity -2 pcs

Time schedule for utilities-mechanical parts Next week we will continue the telephone pre-screening process and start RFI administration process for some items Steps

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to prescreening process

3

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client

4

Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out supplier audit

© 2013 Dragon Sourcing. All rights reserved.

W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14 9-Sep 16-Sep 23-Sep 30-Sep 7-Oct 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec 9-Dec

N a t i o n a l H o l i d a y

Process before audit

36

Today

Original audit week

Current audit week

Milestones

Status of identified suppliers for utilities-mechanical parts -409 equipment suppliers identified so far, 336/409 suppliers contacted, 73/409 suppliers pending to contact, 116/336 suppliers go to pre-screening process, 75/336 suppliers need further contact, 145/336 suppliers eliminated from the process Number of suppliers initially identified Equipment: 409

Supplier indentified

Telphone screening

RFI sent

No. of suppliers successfully contacted Equipment: 336

No. of suppliers not contacted yet Equipment: 73

No. of suppliers unsuccessfully contacted 0

No. of suppliers go to pre-screening Equipment: 116

No. of suppliers need to double check Equipment: 75

No. of suppliers eliminated Equipment: 145

-Chiller & AHU : 71 suppliers -Cooling tower: 25 suppliers -Heat exchange: 9 suppliers -Pump: 5 suppliers -Air compressor: 6 suppliers

-Cooling tower: 26 suppliers -Heat exchange: 4 suppliers -Pump: 45 suppliers

NDA sent

RFQ sent

Selected for audit

Selected for sample

Negotiate contract

© 2013 Dragon Sourcing. All rights reserved.

37

Main reasons are suppliers can’t meet requirements or don’t produce want we want

Next Steps-mechanical parts Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

1.

Telephone pre-screening process for pump and valve

DS

31-Oct

2.

Analyze pre-screening results and finalize list for RFI process

client/DS

31-Oct

3.

Administrate RFI process

DS

8-Nov

4.

Develop and finalize score card template

DS

8-Nov

5.

Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

14-Nov

6.

Administrate RFQ and NDA process

DS

29-Nov

7.

Analyze RFQ result and recommend suppliers for audit

DS

4-Dec

Š 2013 Dragon Sourcing. All rights reserved.

38

Remarks

Agenda

1. Engineering service- Finished 2. Construction service- On going

3. Pipelines- On going 4. Tank- On going 5. Automation- Not started yet

6. Utilities- On going 7. Part of production line-On going

Š 2013 Dragon Sourcing. All rights reserved.

39

Demand analysis- equipments for part of the production line Pump

Air Dryer

Root type blower

Mixer

Refining system

Cooling system-tempering machine

Š 2013 Dragon Sourcing. All rights reserved.

40

Demand analysis- equipments for part of the production line Pressure vessel

Š 2013 Dragon Sourcing. All rights reserved.

Roaster

41

Valves

Demand analysis- part of the production line Conveyor belt

Š 2013 Dragon Sourcing. All rights reserved.

42

Demand analysis- part of the production line In pusher chain

Š 2013 Dragon Sourcing. All rights reserved.

43

Time schedule for part of production line We will continue pre-screening process and develop the RFI Steps

W1 W2 W3 23-Sep 30-Sep 7-Oct

Approach

1

Collect detailed technical information

2

Identify list of potential suppliers in China to prescreening process

3

Carry out a phone pre-screening of the suppliers based on (1) maximum 4-5 screening criteria per category with these criteria to be provided by client

4

Develop the RFI-RFQ – jointly with client– to include all key supplier qualification criteria

5

Administer the RFI process to ensure as high a return rate as possible

6

Analyze RFI responses by score card and recommend suppliers which client needs to the RFQ process

7

Administrate RFQ and NDA process

8

Analyze RFQ responses by score card and recommend suppliers with client for audit

9

Carry out audit

© 2013 Dragon Sourcing. All rights reserved.

W4 W5 W6 14-Oct 21-Oct 28-Oct

W7 W8 W9 W10 W11 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec

W12 9-Dec

N a t i o n a l H o l i d a y

Process before audit

44

Today

Original audit week

Current audit week

Milestones

Status of identified suppliers for part of production line -248 suppliers have been identified so far, including 198 equipment suppliers and 50 production line suppliers Supplier indentified

Telphone screening

RFI sent

NDA sent

RFQ sent

Selected for audit

Number of suppliers initially identified Equipment: 293 Production line: 50 No. of suppliers successfully contacted Equipment: 63 Production line: 33

No. of suppliers not contacted yet Equipment: 230 Production line: 17

No. of suppliers unsuccessfully contacted Equipment: 0 Production line: 0

No. of suppliers go to pre-screening Equipment: 63 Production line: 5

No. of suppliers need to double check Equipment: 0 Production line: 28

No. of suppliers eliminated Equipment: 0 Production line: 0

Remark: Supplier number for equipments: -Air dryer : 41 suppliers -Tempering machine: 17 suppliers -Pump: 41 suppliers -Refining machine: 22 suppliers -Mixer: 17 suppliers -Blower: 50 suppliers -Roaster: 10 suppliers -Valve: 95 suppliers

Selected for sample

Negotiate contract

Š 2013 Dragon Sourcing. All rights reserved.

45

Next Steps-mechanical parts Below are the proposed next steps with responsibilities and deadlines according to the schedule.

The deadlines need to be adjusted to take into account the client availability.

Actions

Responsible

Deadline

DS

31-Oct

client/DS

31-Oct

1.

Telephone pre-screening process

2.

Analyze pre-screening results and finalize list for RFI process

3.

Administrate RFI process

DS

15-Nov

4.

Develop and finalize score card template

DS

15-Nov

5.

Analyze RFI result and recommend suppliers for RFQ process and NDA process

DS

19-Nov

6.

Administrate RFQ and NDA process

DS

29-Nov

7.

Analyze RFQ result and recommend suppliers for audit

DS

4-Dec

Š 2013 Dragon Sourcing. All rights reserved.

46

Remarks