Steel Parts Sourcing Case Study – Dragon Sourcing

Dragon Sourcing Your Tailored Approach to Emerging Markets

Steel Parts Sourcing Latam Case Study

Agenda

1.

Product Scope

2.

RFI Results

3.

Supplier Scoring

4.

Company Profiles for example

2

The project covered six references of Steel Parts

Product Description

Picture Reference

Quantity / pcs. Year

Drawing Nr.

Main Beam WU 12

22.400

551349100

Edge Support

1.000

551349110

Double Wailing Stiffener

40.000

551349102

Bracing Connector Small

2.000

551349150

Vertikalprofil MF 160

500

580660000

Bracing Connector

4.000

551349140

3

Agenda

1.

Product Scope

2.

RFI Results

3.

Supplier Scoring

4.

Company Profiles for example

4

Over 138 Steel Parts suppliers identified, Nineteen (19) suppliers finally submitted RFI

137

137

53

20

5

19

19 suppliers are located in Brazil (5), Mexico (13) and Peru (1) COMP ANY NAME XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

COUNT RY BRAZIL BRAZIL BRAZIL PERU MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO MEXICO BRAZIL BRAZIL MEXICO

Mexico

Peru

6

Brazil

Agenda

1.

Product Scope

2.

RFI Results

3.

Supplier Scoring

4.

Company Profiles for example

7

Scoring Criteria and weight are basing on five different sections of the RFI document: 1. Business Information Business information

Score is basing on a 100 points score base:

Section

Year Founded

5%

Registered capital in USD

5%

Turnover in 2014 in USD

5%

Workfloor area

5%

No. of employee

3%

English speaking employees

2%

Export experience

15%

Number of years in the Steel Industry

10%

Profile of Top Customers

20%

Steel Parts in their core business % of their total revenue

5%

Steel Parts export experience

15%

Weight of criteria

Business Information

10%

Production

30%

Quality Management

25%

Social Responsibilty

5%

RFI Products Capacity

25%

Cooperation

5%

Total

Weight of criteria

100%

Manufacturer or retailer Subtotal

8

10% 100%

Scoring 1=After 2010 2=Between 2006 to 2010 3=Between 2000 to 2005 4=Between 1995 and 1999 5=Before 1995 1=Less than 100,000 2=100,000 - 500,000 3=500,000 -1M 4= >1M 1=Less than 1M 2=Between 1 to 3M 3=Between 3 to 5M 4=More than 5M 1=Less than 1,000m2 2=1,000m2-5,000m2 3=5,000m2-10,000m2 4=Above 10,000m2 1=Less than 50 employees 2=50-100 employees 3=100-300 employees 4=300-500 employees 5=Above 500 employees 0 = don't have 1 = have 0= no export, no license 1=Less than 5 years 2=5-10 years 3=More than 10 years 1=Less than 5 years 2=5-10 years 3=More than 10 years 0=Not provided 1=Local customers 2=National customers 3=International customers 4= Lead European retailers customers 0 = < 5% 1 = 5% - 20% 2 = 20% - 50% 3 = >50% 0 = not export 1 = export but not to Europe 2 = export and to Europe 0 = retailer 1 = Manufacturer

2. Production, 3. Quality Management, 4. RFI Products Capacity 5. Social Responsibility and additionally, and additionally 6. Cooperation during screening process Production

Yearly production capacity

Weight of criteria

20%

Production equipment

20%

Maintenance program

10%

Production process description

25%

Control raw materials - Steel

5%

Product shelf life

10%

Able to provide shelf ready packaging

Able to pack using slip sheets

Subtotal

5%

5%

Scoring

Quality Management

0= Below 100 1 = 100 - 500 2 = 500 - 1,000 3 = 1,000 2,000 4 = 2,000 - 3,000 5 = > 3,000 0 = not listed 1 = listed 0 = don't have 1 = have 0 = not desribed 1 = described but incomplete 2 = Yes, clearly described 0 = not desribed 1 = described but incomplete 2 = Yes, clearly described

15%

0= No 1= Yes

Certifications European Standard En 1092-2

10%

0= No 1= Yes

Welding certificate (EN 1090-1 Table B.1)

15%

0= No 1= Yes

Relevant EU Regulation

10%

0= No 1= Yes

Conformity of the Factory Production Control (Regulation 305/2011 EU)

5%

0= No 1= Yes

Others

5%

0= No 1= Yes

Quality control process

Social Responsibility

5%

Waste management

5%

0= No 1= Yes

Weight of criteria 40%

Adhere to all rules and regulations in respect to child labor

30%

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

30%

20%

0= No 1= Yes to 1 2 = Yes to 2 3 = Yes > 2

Supplier management process

Subtotal

BSCI implemented

10%

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

0= No 1= Yes

100%

RFI Products Capacity

Scoring

ISO 9001

In house test equipment

0 = not given 1 = 1-2 Y 2 = > 2Y 0 = no 1 = Yes 0 = no 1 = yes ready to do it 2 = yes, ability and experience to do it

Weight of criteria

Able to produce Main Beam WU 12 specifications given

10%

Able to produce Edge Supportspecifications given

10%

Able to produce Double Wailing Stiffener specifications given

10%

Able to produce Bracing Connector Small specifications given

10%

Able to produce Vertikalprofil MF 160 specifications given

10%

Able to produce Bracing Connector specifications given

10%

For products they can offer - ability to meet the demand

15%

Ability to meet requirements specifications

15%

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

10%

100%

Scoring

Subtotal Cooperation

0= No 1= Yes 0= No 1= Yes 0= No 1= Yes

100%

Scoring 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes, partly 2 = Yes, all of mushrooms 0 = No 1 = Yes but not for all 2 = Yes, no issue 0 = No answer 1 = Answer and understand (with Questions possibly) 0 = No answer 1 = Answer and understand (with Questions possibly)

100% Weight of criteria

Scoring

Cooperation during RFI

50%

1= Poor 2= Satisfactory 3= Excellent

Completeness of RFI

50%

1= Poor 2= Satisfactory 3= Excellent

Subtotal

9

Weight of criteria

100%

19 suppliers were scored and ranked according to the scorecard.

Suppliers’ scores range from 44 to 73 out of 100.

10

Suppliers’ scores range from 44 to 73 out of 100. The low scores are more a reflection of suppliers not wanting to divulge information prior to getting feedback on their samples than a real ranking of their capabilities.

RANK

Supplier

Business Information

Production

Quality Management

Social Responsibility

RFI products capacity

Cooperation

10%

30%

25%

5%

25%

5%

Total out of 100

1

XXX

7

14

21

3

25

3

73

2

XXX

6

14

21

3

25

3

72

3

XXX

6

14

15

3

25

3

66

4

XXX

4

15

15

3

25

3

65

5

XXX

6

19

6

3

25

4

63

6

XXX

8

13

10

3

25

3

62

7

XXX

6

13

11

3

25

4

62

8

XXX

4

16

11

3

25

3

62

9

XXX

4

14

11

3

25

3

60

10

XXX

4

14

11

3

25

3

60

11

XXX

4

10

15

3

25

3

60

12

XXX

5

14

10

3

25

3

59

13

XXX

3

14

11

3

25

3

59

14

XXX

4

13

8

3

25

4

57

15

XXX

0

14

11

3

25

3

56

16

XXX

6

13

4

3

25

3

54

17

XXX

4

15

6

3

20

3

51

18

XXX

4

15

6

3

20

3

51

19

XXX

6

6

3

3

25

2

44

11

Agenda

1.

Product Scope

2.

RFI Results

3.

Supplier Scoring

4.

Company Profiles for example

12

Company Profile #1 GENERAL INFORMATION Company Name

XXX

Address

XXX

State

XXX

Country

Mexico

Company Website

HUMAN RESSOURCES

XXX

Total # employees

194

Good English speakers (Y/N, #)

150

Production

Quality

R&D

Admin

150

19

5

20

CONTACT INFORMATION Contact Person

XXX

Title

XXX

Email

XXX

Tel

XXX

Mobile phone

TURNOVER IN USD 2012

2013

2014

2015

31.000.000

40.000.000

50.000.000

N/A

XXX % SALES EXPORT TO MAIN MARKETS IN 2014

BUSINESS INFORMATION Found Year

1999

Nationality

Mexican

Production location

XXX

Ownership

Private

Capital in USD

N/A

Work floor size (m²)

90,000 ft²

Years in Steel Parts

30 Years

License for self import/export (Y/N)

Yes

Years of export experience

30 Years

Deliver to retailers in Europe (Y/N) Current EUR retailers supplied

EU (%)

US (%)

Others (%)

Total (%) export

10%

70 %

10 %

90 %

MAIN CUSTOMERS Customers

Industry Product category

Country

Percentage of sales

XXX

AUTOMOTIVE

USA

50 %

XXX

AUTOMOTIVE

USA

15 %

Yes

XXX

GLASSWARE

Mexico

10 %

• Honda WQ (Robotic) / • Honda Accord (Robotic) • Honda Pilot (Robotic) / • Ford U388 (Robotic)

XXX

INDUSTRIAL

USA

10 %

13

Company Profile #1 CORPORATE & SOCIAL RESPONSIBILITY Implemented BSCI - (Business Social compliance No initiative) Adhere to all rules and regulations in respect to Yes child labor (Y/N) Adhere to all rules and regulations in respect to Yes environmental issues (Y/N) Adhere to all rules and regulations in respect to Yes health and safety issues (Y/N)

PRODUCTION PROCESS

Production process description

Raw Material Steel U dimension range 120mm-130mm

Hot-Galvanizing : In- House Dip Coating: In- House Spray Painting: In- House Galvanizing: In- House Powder Coating: In- House Laser Cutting: In- House Blanking :In- House Drilling: In- House Milling:In- House Turning: In- House Autogenous welding:In- House

Y/N

1018, 1045, 4140T, H13, 12L14, SS 300 A36 ALU, STAINLESS

Incoming material Quality Inspection Raw Materials Incoming material Quality Inspection Packaging material

Packaging QUALITY CERTIFICATION Date of Certificate Name Certificate ISO TS 16949

Certifying Organization

10/21/2012

Certification ISO 9001

11/2004

Certification ISO 14000

12/05/2013

Product manufactured and controlled in accordance with...

Y/N

Comment

Certifications European Standard En 1092-2

Yes

N/A

Welding certificate (EN 1090-1 Table B.1)

Yes

N/A

Conformity of the Factory Production Control (Regulation 305/2011 EU)

Yes

N/A

Yes

Yes

In-process Quality Inspection

Yes

Finished Goods Quality Inspection

Yes

What performance do you achieve on average in out going quality measures (% rejected) ?

Certification # 2005116427

Women Business Enterprise

Instrumentos de medicion Vernier, Micrometro CMM Brown & Sharp (0.70 x 0.70 x 0.50) CMM Zeiss (1.20 x 2.00 x 1.20) Optical comparator Hardness Tester

3 %

Process for supplier evaluation

Yes

Long term contracts with your suppliers

Yes

Traceability measure

ERP

Data available upon request

Yes, ERP

Measures in place for record tracking

14

QUALITY PROCESSES Process description

ERP

Company Profile #1 FACTORY PICTURES & PRODUCTS Factory Entrance

Factory Office

Workshop

Workshop

Workshop

Pictures of workers

Workshop

Quality control lab

Machinery

Machinery

Raw materials warehouse

Machinery

Finished goods Warehouse

Showroom

15