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