An Automotive company experienced a significant increase in price of Rare Earth Magnets that required a review of the entire sourcing strategy. The key cause of the increase cited by suppliers was an astronomical price increase of a principle raw material Neodymium, a rare earth element, the supply of which is controlled by China. Dragon Sourcing was commissioned to investigate the current price hike, the role of China and how to mitigate future risks.
Conducted structured interviews with buyers, suppliers and industry experts to:
Understand the Neodymium and Rare Earth Magnet market, Map the value chain of the industry and the role of different players involved, Understand the role of the Chinese government and its impact on the prices
Secondary Research: Conducted online research including trade bodies to:
Clarify the market dynamics of the industry, Determine the demand from different applications
Supplier Research: Conducted a request for information process with suppliers both in China and in the rest of the world, to validate the primary and secondary research.
Recommended the best sourcing strategies based on a full understanding of the supply chain players.
Proposed the optimum contract length and structure to mitigate future price increases
A large European Retailer was subscribing to multiple market databases to monitor the prices of the different polymers to be able to make informed purchase decisions. The Retailer found the multiple subscriptions to be expensive, inefficient to access due to the different databases, and only useful in tracking historical pricing. Dragon Sourcing was commission to prepare tailored category dashboards including price forecasting that would support informed purchase decisions.
Analysed the data
Analysed the data requirements that would support procurement decision making.
Designed and researched
Designed and researched the tailored category dashboards to include:
Price indices and forecast of the polymers on a regional level
Supply-Demand Dynamics of the polymers, updated to the current period
Supply chain Monitoring including colour coded alerts on potential disruptions
Recent news in the markets
Refreshed and published
Refreshed and published the dashboards on a periodic basis
With the periodic category dashboards the Retailer was able to:
1. Make informed purchase decisions based on a current view of their polymer market and forecast pricing.
2. Increase productivity through a reduction in the time required to collecting and analyse data.
3. Reduce the costs in acquiring the market data
4. Gain timely awareness about potential risks to their polymer supply chain