One of our Norwegian clients, who is a major supplier of premium children’s cots in the global market, recently contacted us. They asked us to deliver sustainable procurement savings by identifying competitive suppliers in Mexico and Turkey through a rigorous evaluation.  

Based on the detailed case study, Dragon Sourcing carried out a comprehensive sourcing project for carrycots in Mexico and Turkey, spanning a period of 13 weeks. The team identified 59 potential vendors, obtained 27 signed NDAs, and received 6 complete RFI/RFQ responses.  

Key findings include 

  • All responding suppliers can develop molds in-house or via outsourcing, and they are willing to accept existing molds from the client. 
  • Most sellers primarily assemble products for industries like automotive and electronics, with only one Turkish supplier having limited baby product experience.  
  • Initial quotes showed negative savings ranging from 9% to 143% compared to current costs.  
  • Major cost drivers were high component prices (64% of total cost), fixed textile import costs ($41.60 per unit), and additional expenses for user guides, pallets, markups, and assembly.  
  • Mexican suppliers face a 16% local tax, while Turkish suppliers pay 14% in local and export taxes.  
  • The sea freight from Mexico to Rotterdam is approximately 2.5 times higher than that from Turkey. 

The project evaluated vendors using a detailed scorecard across 10 categories. The top-ranked suppliers were Supplier 3 (Turkey), scoring 62.6 points, and Supplier 2 (Turkey), scoring 57.7 points.  

For the next steps, Dragon Sourcing recommends: 

  1. Auditing the 5 shortlisted sellers 
  2. To obtain more accurate quotations, we provide samples and 3D drawings.
  3. Focusing on reducing component costs, particularly for the Crusi CC Base and Frame 

Despite the initial higher costs, further negotiation and optimization could potentially yield savings in future rounds.  

Share This:
Download Pdf
x