Background
La Société Générale is one of the largest European bank with key activities in retail banking, asset management and investment banking. La Société Générale wanted to evaluate the price competitiveness of its gift supplier by conducting a benchmarking exercise on a representative sample of products of its gift catalogue by getting quotations (on an FOB and DDP basis) directly from the manufacturers in China
Approach
- Selected 15 products to benchmark representative of the types of products in the catalogue
- Qualified through an RFI process more than a 100 Chinese suppliers capable of responding to SG’s requirements
- Run RFQ process with short listed suppliers to get reliable FOB price information per product
- Calculated fully delivered costs from FOB to DDP France to include all logistics and import duties costs
- Estimated additional cost for current supplier to provide service from warehouse to end SG customer
Results
Identified an average 20-25% cost gap between currently quoted DDP prices and quotes gotten direct from Chinese manufacturer
Identified potential new sourcing strategy to be tested out in new RFQ process
From buying full service from current supplier…
…to potentially uncoupling China sourcing element from the France logistics element and leveraging synergies with SG logistics department currently managing all administrative suppliers in the retail network