Automotive Magnets

Automotive Magnets

Background

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.

Approach

Primary Research

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

Secondary Research: Conducted online research including trade bodies to: Clarify the market dynamics of the industry, Determine the demand from different applications

Supplier Research

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.

Results

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

Polymere für Einzelhandel

Polymere für Einzelhandel

Background

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.

Approach

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

Results

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

Pharma Gum

Pharma Gum

Background

A European Pharmaceutical company was in the final stages of developing a product which required High Grade Natural Gum as an ingredient. During research and development small quantities of the ingredient had been sourced from European distributors. To support production, Dragon Sourcing was commissioned to conduct a supply market analysis and propose a sourcing strategy for higher volumes of the ingredient at lower cost and to ensure continuous supply of the seasonal material from South East Asia. The key challenge in conducting the supply market analysis included the limited availability of the information in the public domain.

Approach

1. Primary Research: Conducted structured interviews with industry experts including buyers, suppliers and farm experts in South East Asia to

  • Identify and understand the different supply regions of South East Asia
  • Understand the Value Chain of the natural gum in the different regions and the role of different players in the supply chain including farmers, intermediate traders, exporters and Western suppliers
  • Discuss the prevalent best practices followed by various large Western buyers to mitigate the risk of seasonality and bad harvest

2. Secondary Research: Approached global organizations and trade associations like FAO, USDA, CIFOR and different regional government bodies to access information on:

  • Harvest of natural gum, seasonality and farming best practices to maximise yield
  • Estimates of the capacity, production and export capabilities of the natural gum at the different large farms at a regional level
  • Domestic market of the natural gum and trade volumes of the different supply regions
  • Supply Chain of the natural gum and the different regional players in the supply chain and their capacity and bargaining power
  • Government regulations and environmental policies of the different supply regions

3. Supplier Research: Identified suppliers at a regional level and conducted requests for information to validate the data from the other sources.

Results

Dragon Sourcing prepared a sourcing report on the Industry and made recommendations on the sourcing strategy based on the bargaining power of the different players involved and the best practices followed in the industry including:

1. Best sourcing options from the different sourcing regions
2. Sourcing entry at the right level in the supply chain and the merits and demerits at each player level
3. Recommendations on the optimal contract length, structure, price levels and number of suppliers