Dragon Sourcing undertook a comprehensive sourcing project, targeting CNC Turned and milled parts, focusing on key markets in Turkey, Slovakia, and Romania. The goal was to establish a robust supplier base and optimize procurement strategies to meet high production demands and specific technical requirements.
The project started with a thorough demand study that determined the yearly requirement for a variety of items, including feedback levers at 165,000 units and piston pads at 738,000 units. We went through a strict procedure with our buying approach. There are two vendors in each of Romania, Slovakia, and Turkey for the category of CNC turned components that need to be purchased.
Significant challenges were encountered during the sourcing phase. For instance, about 46% of suppliers could not meet the tough technical and quality standards needed for complex parts. Many of them said they would need big investments due to the high precision and quantities. This led to a rejection rate of about 30% for suppliers who were considered not competent for the project.
Some of the reasons due to which many suppliers were found to be not eligible for this project includes the following:
- Do not want to fill the RFI template
- Tolerances are too tight.
- No communication.
- Not in their product range.
- Capacity full.
- Cannot meet the technical requirement
Despite these challenges, the structured approach allowed Dragon Sourcing to shortlist competent suppliers. We selected suppliers carefully. We did this through telephone pre-screening and balanced scorecard evaluations. Our expert chose them based on their ability to meet product specs and volume.
This case study shows the need for a tailored sourcing approach. It must fit the complexities of international sourcing. Dragon Sourcing’s method ensures a high return on investment. It also helps clients navigate complex global supply chains.