Ahold

Ahold

Background

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.

Approach

  • 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

Results

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

Saint-Gobain Vidros S/A-Santa Marina

Saint-Gobain Vidros S/A-Santa Marina

Background

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.

Approach

  • 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.

Results

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.

St Gobain

St Gobain

Background

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.

Approach

  • 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

Results

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.

Danone

Danone

Background

Danone is one of the largest food and beverage companies in the world experiencing significant year-on-year sales growth in China. Danone decided to open its own yoghurt factory in Beijing and hence looked to Dragon Sourcing for support in the following 2 areas:

  • Find dairy farms within a 300 Km radius of the factory to ensure a stable and long-term supply of pure fresh milk sources to the factory.
  • Find air freight suppliers able to deal with their logistic requirements in terms of volume and “cold chain” quality requirements .

Approach

  • Collected detailed demand requirements for milk sources and services requirements for multimodal door to door operation
  • Analyzed the possible sources to find dairy farms in target regions and underlying cost drivers
  • Qualified through RFIs local dairy farms and Chinese suppliers capable of responding to Danone’s logistic requirements
  • Visited the short listed dairy farms jointly with Danone French milk expert to investigate and identify the capacity and quality of the farms
  • Asked short listed suppliers to provide solutions to maintain the “cold chain” and developed a clear delivery process from Beijing factory to Guangzhou airport.
  • Run RFQ process with suppliers to select preferred partners
  • Developed detailed cost model of Chinese suppliers to confirm reliability of RFQ process
  • Conducted negotiations jointly with Danone and finalized suppliers’ selection
  • Finalized terms for contracting in line with Danone legal terms and conditions

Results

Qualified a pool of dairy farms in Beijing and Tianjin with required milk capacity

Worked out with Air Freight suppliers cold chain process from Beijing Factory to Guangzhou warehouse by using isotherm covers

Organized effective fresh milk collection route for a rented 20T milk truck to ensure the 4℃ cold chain delivery to Beijing yogurt factory

Proposed an alternative by using refrigerated trucks

Bugaboo

Bugaboo

Background

Bugaboo is one of the fastest growing company in the baby stroller business, occupying a market leadership position in the high end segment of the market. Given the exponential growth experienced by company, the entire supply chain and procurement focus was to keep their factory capable of manufacturing and delivering to customer requirements. As a result, very limited efforts had been devoted to identifying and partnering with potentially more competitive suppliers. The company’s management considered it was time to investigate the potential of having an assembly factory in China to take advantage of the development and technical opportunities as well as the competitiveness of this country.

Approach

  • Conducted initial assessment of procurement capabilities and of current suppliers’ performance in regard of Bugaboo’s growth perspectives
  • Developed a complete business case for leveraging China sourcing opportunities with a new assembly factory in China, supported by a detailed “as-is” cost model of Taiwan factory and “to-be” cost model of the China based one
  • Conducted the analysis that lead to the selection of the new factory location
  • Supported the program management of the Chinese factory ramp-up
  • For 4 major spend categories accounting for 85% of total costs, screened 1500+ suppliers through a rigorous RFI / RFP / factory audit process in order to assess their ability to:
    –    Efficiently respond to Bugaboo’s current needs and support future developments
    –    Meet Bugaboo’s Corporate Social Responsibility requirements
  • Monitored sample making and testing/approval by Bugaboo until final qualification of suppliers

Results

Developed a compelling business case for a factory in China and fully supported the achievement of the corresponding benefits

Identified an attractive location for the new Chinese factory

Supported the adoption of a “design for manufacturing” approach in order to adapt the specification process to constantly increasing needs of quality and supply flexibility

Developed a whole set of tools to screen and qualify suppliers (RFI, RFP, supplier audit report) that became Bugaboo standard

Developed a strong supply base for the 4 major spend categories and miscellaneous other ones

Negotiated prices confirming and sometimes exceeding the anticipated savings

Initiated the development in China of a strong Bugaboo production platform for future developments