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.
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