Ahold is one of the largest retailers in the world with turnover close to $60B and 3500 supermarkets located in Europe and the USA. Ahold purchases a lot of its goods (for resale and not for resale) from China using agents and traders but decided to launch a program focused on buying direct from manufacturers in order to exercise a much higher level of control over the whole supply chain. In order to test this new approach, Ahold asked for the sourcing support from Dragon Sourcing on a number of pilots.
- Ran detailed RFI process with identified suppliers to assess suppliers’ capabilities
- Ran RFQ process with shortlist of suppliers to select suppliers with whom to conduct audits and face to face negotiations
- Conducted on site audits of three most competitive suppliers
- Negotiated and selected most competitive and capable suppliers
- Managed first 2 PO’s and conducted on site Quality Control prior to shipment
Identified highly competitive suppliers
Qualified suppliers to ensure capability to meet Ahold’s requirements
Helped achieved significant savings compared to « as-is » situation using trading companies
Helped in setting up QC system (in close cooperation with 3 rd party QC agencies)
Was selected by Ahold to act as on-going procurement service provider in China focusing initially on store equipment and disposal categories
Since then have moved into the sourcing of many new categories to include textiles, health and beauty care products, suitcases,…
Was asked to open office in Vietnam to support sourcing initiative in that country on the same basis as China
Pernod Ricard is the second largest alcoholic beverage company in the world experiencing significant year-on-year sales growth in China resulting in ever increasing marketing and promotional budgets. Client was concerned that the spend with external marketing suppliers was not optimized and that world class sourcing practices were not being applied
- Created multi-functional team with representatives from Marketing and DS buyers
- Selected pilot categories to test opportunity associated with deploying world class sourcing processes (glass and metal products)
- Drove strategic sourcing process on selected pilot categories
- Developed list of qualified suppliers for both technology segments through and RFI process
- Run RFQ process with short listed suppliers to select preferred partners
- Negotiated final frame agreements
- Reviewed current procurement processes, organization and systems
Fundamentally changed sourcing strategy:
– from brand segmentation to technology segmentation
– from « spot » buying to frame contracts
– from « creative agency » to « direct »
Negotiated between 30 to 40% cost reduction on pilot categories
Changed sourcing processes and organization
Client decided to outsource the procurement of all its BTL categories to Dragon Sourcing
Santa Marina is a Brazilian based Division of Saint-Gobain Vidros S/A which in turn is part of Saint-Gobain, a French multinational that started its activities more than three centuries ago in the glass manufacturing industry. Saint-Gobain has become a market leader in several industrial branches, and is among the 100 largest industrial companies in the world.
Dragon Sourcing’s client, Santa Marina is a specialized manufacturer and distributor of glass tableware such as plates, glasses, cups, pans, salad dishes, bowls, and dinnerware which are sold worldwide under the Marinex® brand.
In the spring of 2009, their purchasing group approached Dragon Sourcing to embark on a spot-sourcing initiative in China to procure several kitchenware items to complement its existing product line. As a result of this first successful experience buying from China, Santa Marina has decided to embark on a long-term partnership with Dragon Sourcing in order to pursue new sourcing activities with a larger number of product categories.
- Develop list of qualified suppliers for all key categories through a RFI/RFQ screening process
- Attend sourcing fairs (such as Guangzhou Import and Export Fair) with Santa Marina management team to identify new suppliers and new product ideas.
- Conduct price negotiations with suppliers on behalf of the client
- Based on negotiation process, select suppliers for each category
- Manage sampling process
- Conduct factory audits
- Schedule Quality Control and Pre-shipment Inspections through a 3rd party QC provider
- Oversee the logistics to ensure proper communication between the client, freight-forwarder and supplier.
- Manage the laboratory testing procedure to verify product compliance with international food safety requirements.
- Dragon Sourcing is closely integrated within the Santa Marina company and communicates daily with a number of Santa Marina’s departments: Purchasing, Marketing and Quality Assurance.
Successfully identified first-class suppliers in the following categories: plastic lid, stainless steel, plastic and silicone kitchenware accessories, opal glassware.
Demonstrated the ability to source better quality products compared to items which were previously sourced locally in Brazil.
Managed to successfully meet the client’s demands in terms of delivery time and costs.
Due to direct communication with client’s marketing department, product development lead time was shortened, in turn accelerated new product launch into the Brazilian market.
Kesslers International is Europe’s leading specialist designer & manufacturer of Point of Purchase displays and merchandising. To be able to competitively respond to major tenders in the future, Kesslers decideds to contract Dragon Sourcing to qualify suppliers with metal working, wood working & plastic extrusion/moulding capabilities as well as complete display suppliers in selected regions of China and Vietnam.
- Dragon Sourcing initiated the project by collecting the capabilities required by the suppliers together with the technical requirements for sample projects requiring the different process capabilities.
Through an extensive supply market analysis over 600 potential suppliers were identified in China & Vietnam.
A rigorous RFI/RFQ process was administered to understand the supplier’s capabilities and competitiveness, resulting in 45 full responses.
The responses to the RFI/RFQ were analysed using a balanced score card to rank suppliers and recommend those for audit visits
Dragon Sourcing organised and accompanied Kesslers in the auditing of over 14 suppliers in China & Vietnam.
Dragon Sourcing successfully qualified Chinese and Vietnamese suppliers with the capability to support Kesslers in the future.
Kesslers ability to successfully respond to future tenders is now increased through access to quotes from a wider supply base.
St Gobain Packaging is one of the 2 world’s largest company specializing in glass packaging for the food and beverage industries. Saint Gobain Packaging wanted to challenge its current carton supplier base in Europe by conducting a benchmarking exercise in China and in Vietnam. Saint Gobain asked Dragon Sourcing to support its sourcing initiative to find corrugated plate suppliers capable of covering their demand of roughly 4 millions plates/year spread over 10 different references.
- Collected detailed demand requirements for corrugated cardboard sheets
- Identified more than 250 suppliers to involve in RFI process
- Qualified through the RFI process 28 Chinese suppliers and 2 Vietnamese suppliers capable of meeting Saint Gobain’s requirements
- Created a scorecard in order to pre select suppliers to include in RFQ process.
- Run RFQ process with pre-selected suppliers to develop understanding of FOB price points in China and calculated DDP prices delivered to St Gobain location
- Based on RFQ analysis, audited 13 suppliers in China and in Vietnam.
- Recommended suppliers who can match Saint Gobain requirements in order to move to sample development stage
Identified and audited 13 suppliers capable of meeting client’s technical requirements.
Obtained best possible FOB and DDP prices to benchmark with current European prices
Lack of DDP competitiveness led St Gobain Packaging to replicate same process in Eastern Europe.