Identify new potential competitive suppliers for sourcing of roll container

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Delivering sustainable sourcing value from emerging markets

Roll Container Case Study

Agenda

Š 2017 Dragon Sourcing. All rights reserved.

1.

Objectives

2.

Product specifications

3.

Approach

4.

FOB prices

5.

DDP prices

2

Objectives and approach DS Approach consists in the following work steps:

Context

1. Demand Analysis: Work with the Company 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 the selected markets 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/RFP 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: NDA template authorized by Vossloh that will be distributed to the suppliers who is willing to attend the RFI-RFQ 5. Develop RFI/RFQ : Prepare an RFI/RFQ document, with an aligned Balanced Scorecard that has the objective to pre-qualify the competitiveness and capabilities of the suppliers, including: Background, financial, Client and product experience, Quality certification & processes, Social Responsibility, Manufacturing/technology capability, R&D capability.

6. Conduct RFI/RFQ Administration : The RFI/RFQ is translated to the local languages as relevant, and distributed to the relevant suppliers, with telephone follow-up to push for maximum participation.

7. Analyze RFI/RFQ Responses : Analysis of RFI/RFQ responses, estimation of logistics costs, and preparation of a report which profiles & objectively ranks the suppliers by capability and competitiveness, including a recommendation for those to be audited.

Objectives: • Identify new potential competitive suppliers.

Categories: • Roll Container Geographical scope: • China, India, Thailand, Poland, Slovenia, Turkey and Italy Deliverables: • Supplier database • RFI-RFQ template • RFI-RFQ analysis report • Supplier Profiles and recommended suppliers for Client to audit

© 2017 Dragon Sourcing. All rights reserved.

3

Agenda

Š 2017 Dragon Sourcing. All rights reserved.

1.

Objectives

2.

Product specifications

3.

Approach

4.

FOB prices

5.

DDP prices

4

Roll Container Specification Product Name

CC-ROLL CONTAINER

Weight

30.5kg

Carrying Capacity

500kg UDL

Steel Quality

hot-rolled, pickled material in quality

Coating

hot dip galvanized, thickness of zinc according to DS/ISO 1461 class C.

Annual Volume

10,000 units

Annual Purchasing Spend

690,000 EURO

Dimension

HS code dedicated to customs clearance

871680000000H

Customs rate (based on CIF value)

1.7%

Š 2017 Dragon Sourcing. All rights reserved.

Product Picture

Agenda

Š 2017 Dragon Sourcing. All rights reserved.

1.

Objectives

2.

Product specifications

3.

Approach

4.

FOB prices

5.

DDP prices

6

Since wire shelving and roll container are in the same industrial field, we used our current screened wire shelving database, plus identified 22 additional roll container suppliers for this project and collected 10 FOB quotations

Selection of potential suppliers

34 suppliers

22

Pre-selected suppliers

Sending & follow up of the RFQ

Criteria Products category Export experience

Reasons for not responding to the RFQ No ressources available No manufacturing capabilities No interest for this project

21 suppliers

Total 10 suppliers’ quotation received

18

7

12

1st Supplier List

3

3

Selected Supplier for RFQ

Collected Quotation

Wire Shelving Supplier © 2017 Dragon Sourcing. All rights reserved.

Analysis of the suppliers’ offer

Roll Container Supplier

The pre-selected suppliers are mainly located in the Jiangsu province (4) and Shanghai (4), the remaining ones are in Guangdong (1) and Zhejiang (1)

Supplier name

Province

City

1

Jiangsu

Changshu

2

Jiangsu

Changshu

3

Shanghai

Shanghai

4

Shanghai

Shanghai

5

Guangdong

Shenzhen

Heilongjiang

Jilin Liaoning Hebei Gansu

6

Jiangsu

Suzhou

7

Zhejiang

Yiwu

8

Shanghai

Shanghai

9

Shanghai

Shanghai

10

Jiangsu

Suzhou

BEIJING

Neimongu

Shanxi

Ningxia Gansu

Shandong Shanghai Jiangsu: 4 suppliers

Henan

Shaanxi

SHANGHAI: 4 suppliers Anhui

Hubei

Sichuan

Zhejiang: 1 supplier Jiangxi

Hunan

Fujian

Guizhou Yunan

Guangxi

Guangdong: 1 supplier HONG KONG

Š 2017 Dragon Sourcing. All rights reserved.

Agenda

Š 2017 Dragon Sourcing. All rights reserved.

1.

Objectives

2.

Product specifications

3.

Approach

4.

FOB prices

5.

DDP prices

9

Synthesis of the collected quotations: FOB EURO price per units

Supplier Name

Province

City

FOB Price in US$ per Unit

FOB Price in EURO per Unit

1

Jiangsu

Changshu

US$82.00

€ 64.79

2

Jiangsu

Changshu

US$67.50

€ 53.33

3

Shanghai

Shanghai

US$66.88

€ 52.84

4

Shanghai

Shanghai

US$77.00

€ 60.84

5

Guangdong

Shenzhen

US$95.00

€ 75.06

6

Jiangsu

Suzhou

US$53.75

€ 42.47

7

Zhejiang

Yiwu

US$37.50

€ 29.63

8

Shanghai

Shanghai

US$47.00

€ 37.13

9

Shanghai

Shanghai

US$31.25

€ 24.69

10

Jiangsu

Suzhou

US$80.75

€ 63.80

US$63.86

€ 50.86

Average

© 2017 Dragon Sourcing. All rights reserved.

Synthesis of the collected quotations: FOB EURO price per units Wire Shelving pre-selected suppliers Already visited plant and audited by DS Provided samples for the wire shelving project

Pre-selected Suppliers © 2017 Dragon Sourcing. All rights reserved.

Agenda

Š 2017 Dragon Sourcing. All rights reserved.

1.

Objectives

2.

Product specifications

3.

Approach

4.

FOB prices

5.

DDP prices

12

The DDP price is calculated by adding to the FOB price, the transportation costs, the customs duties, the CIF ROTTERDAM value and the inland transportation (Holland)

EXW Pric e

 Loading on container on manufacturing site

 Sea freight from Shanghai (China) to Le Havre (France)

 Container transportation to Port

 Additional fees (BAF & CAF)

 Export documents expenses, transporation & other taxes  Handling & loading of the container on the vessel

Suppliers’ quotation © 2017 Dragon Sourcing. All rights reserved.

FOB Price

 Insurance cost based on the FOB value, plus the transportation cost

 Port handling cost  Loading cost on truck  Port taxes  Transportation  Customs clearance cost to final fees destination  Fuel taxes

DDP Pric e

Logistics flow from FOB CHINA port to DDP ZAANDAM (THE NETHERLANDS)

Roll Container Packing Information

Product Name

CC-ROLL CONTAINER

Number of pieces per box

1

Carton box size LxDxW (mm)

1800*200*850

Pallet size (mm)

1100*850

Number of pieces in a 20' container with pallet (approximate)

100

Number of pieces in a 40' container with pallet (approximate)

200

HS code dedicated to customs clearance

871680000000H

Customs rate (based on CIF value)

1.7%

Š 2017 Dragon Sourcing. All rights reserved.

Logistics cost from FOB CHINA (Port) to DDP ZANDAAM storage (HOLLAND) Description of the different logistics operations from FOB CHINA Port to ZAANDAM warehouse (HOLLAND)

Container 20’

Sea freight cost from FOB SHANGHAI to CIF ROTTERDAM (HOLLAND)

€735

BAF cost (Bunker Adjustment Fee)

€240

CAF tax (Currency Adjustment Fee) 6.10% to apply on the freight cost of a container

€44

Administrative, Handling & Security charges at the Port of Origin (CHINA)

€84

Total freight cost from FOB SHANGHAI to CFR ROTTERDAM (FRANCE)

€1,103

Handling fees & administrative costs at the container arrival at ROTTERDAM (HOLLAND) International Ship & Port Facility Security Surcharge

€15

Documentation Fee & Administrative cost at Destination

€40

ROTTERDAM Terminal Handling Charge

€138

Total cost of the port & administrative taxes at ROTTERDAM Port (HOLLAND)

€193

Freight cost from ROTTERDAM to ZANDAAM (storage)

€270

Total transportation from FOB CHINA Port to ZANDAAM (storage) Quantity of Roll Container per container (in units)

© 2017 Dragon Sourcing. All rights reserved.

€1,566 100

Synthesis of the collected quotations: DDP ZAANDAM EURO price, based on 20’ container freight cost US$ FOB price / unit

EURO FOB price / unit

Freight cost based on a 20’ container / unit

CIF price

City

Customs duties based on CIF value

Inland transport

DDP unit price

Jiangsu

Changshu

US$82.00

€64.79

€11.03

€75.82

€1.29

€4.63

€81.74

2

Jiangsu

Changshu

US$67.50

€53.33

€11.03

€64.36

€1.10

€4.63

€70.09

3

Shanghai

Shanghai

US$66.88

€52.84

€11.03

€63.87

€1.09

€4.63

€69.59

4

Shanghai

Shanghai

US$77.00

€60.84

€11.03

€71.87

€1.22

€4.63

€77.72

5

Guangdong

Shenzhen

US$95.00

€75.06

€11.03

€86.09

€1.46

€4.63

€92.18

6

Jiangsu

Suzhou

US$53.75

€42.47

€11.03

€53.50

€0.91

€4.63

€59.04

7

Zhejiang

Yiwu

US$37.50

€29.63

€11.03

€40.66

€0.69

€4.63

€45.98

8

Shanghai

Shanghai

US$47.00

€37.13

€11.03

€48.16

€0.82

€4.63

€53.61

9

Shanghai

Shanghai

US$31.25

€24.70

€11.03

€35.73

€0.60

€4.63

€40.96

10

Jiangsu

Suzhou

US$80.75

€63.80

€11.03

€74.83

€1.27

€4.63

€80.73

US$63.86

€50.46

€11.03

€61.49

€1.04

€4.63

€67.16

€4.63

€69.00

Supplier

Province

1

Average Current price

Quotation from pre-selected wire shelving suppliers

© 2017 Dragon Sourcing. All rights reserved.

Quotation lower than current AHOLD DDP price 1 US$ = 0.7901 Euro dated September 11th 2006

Synthesis of the collected quotations: DDP ZAANDAM EURO price, based on 20’ container freight cost

Š 2017 Dragon Sourcing. All rights reserved.