A global client aimed to reduce electronic sourcing costs while maintaining quality standards. They embarked on a strategic sourcing initiative across China, Vietnam, and Turkey. With an annual spend of €4.75 million over 16 RFQ items, the objective was to identify new suppliers offering competitive pricing and consistent quality.
Approach
- The sourcing strategy involved a comprehensive analysis of demand, the supplier market, and pre-screening. We identified a total of 179 potential suppliers: 133 from China, 29 from Turkey, and 17 from Vietnam. The detailed RFI/RFQ process ensured the shortlisting of only those suppliers meeting stringent criteria for evaluation.
- The RFQ process evaluated each supplier’s background, financial health, client and product experience, quality certifications, social responsibility, and production capabilities. This rigorous vetting ensured only the most reliable and competent suppliers were considered.
Key Findings
- We ranked 8 suppliers in China, with an average score of 71. In Vietnam, a leading supplier with a decade of experience showcased the potential for quality and cost savings.
- Savings Potential: The analysis uncovered a potential saving of 15% from Vietnamese suppliers. The overall savings amounted to €630k.
- Supplier Recommendations: Dragon Sourcing recommended further auditing of the top suppliers identified through this process, ensuring that they adhered to the client’s quality standards and pricing benchmarks.
The strategic sourcing initiative demonstrated that a well-planned approach to emerging markets could result in significant cost savings and improved supplier quality. By thoroughly vetting suppliers and leveraging competitive pricing, the client successfully reduced costs while maintaining quality standards in electronics sourcing. The approach not only identified substantial savings but also highlighted the importance of a meticulous sourcing strategy in global supply chain management.