Dragon Sourcing started a strategic sourcing initiative for a top industrial client. The initiative focused on three critical product categories: extruded aluminum, stainless steel, and PVC. The case study outlines how methods optimized cost, quality, and supply chain efficiency in Mainland China. The main goal was to find, assess, and suggest suppliers that meet quality, capacity, and cost needs. The project aimed to deliver a supplier database and various analysis tools within 10 weeks.
Approach and Execution
Dragon Sourcing’s tailored approach comprised several meticulously planned stages:
- Demand Analysis: Initial consultations with the client to understand detailed product specifications, volumes, materials, and quality expectations.
- Supply Market Analysis: We use a variety of resources, such as B2B websites, industry catalogs, and networks, to compile a lengthy list of potential suppliers.
- Telephone Pre-screening: Rigorous screening based on capability, company size, quality certifications, and interest, narrowing down the list for the RFI-RFQ process.
- RFI-RFQ Development and Administration: Send detailed RFI-RFQ documents to pre-qualified suppliers. Then, analyze it to assess supplier competitiveness.
- Supplier Evaluation and Recommendations: Rank suppliers based on responses and conduct optional pre-audits to recommend suitable partners. For the final evaluation, use a balanced scorecard approach.
Key Metrics and Results
- Extruded Aluminum: Out of 38 suppliers initially identified, 24 passed the telephone screening, leading to 5 final recommendations.
- Stainless Steel and PVC: Screening and evaluation processes were conducted similarly. The specific numbers for the RFI-RFQ phase and final recommendations vary based on category requirements.
Ensuring accurate matching of supplier capabilities with the client’s needs was a primary challenge, especially in the diverse Chinese supply market. Dragon Sourcing overcame this with market knowledge, pre-screening, and analysis, which ensured a suitable supplier base. The project set up a reliable, affordable supplier network, which helped the client improve procurement efficiency and save costs significantly. Furthermore, the structured approach and thorough evaluation criteria set a new benchmark for the client’s future sourcing activities.
Dragon Sourcing’s sourcing initiative in Mainland China shows effective supplier selection. It emphasizes process management, analysis, and local market expertise for successful procurement.