Dragon Sourcing conducted a comprehensive sourcing project for a leading baby stroller manufacturer. The client, with a 2016 revenue of EUR 185 million, aimed to secure sustainable procurement savings by identifying competitive suppliers in Vietnam. The project focused on fabric products such as breezy sun canopies, seat liners, and footmuffs.
The project’s objective was to identify suppliers in Vietnam capable of meeting the quality requirements for baby stroller fabric products. The client sought to reduce costs and diversify its supply chain with existing Chinese vendors. Dragon Sourcing’s approach involved detailed spend analysis, seller pre-qualification, and a structured RFI/RFQ process.
Sourcing Approach
- Spend Analysis: The analysis focused on specifications, quality requirements, volumes, and deadlines. This ensured that the suppliers met the client’s needs.
- Supply Market Analysis: Using a robust database and external resources, identify potential vendors.
- Pre-qualification: Conducted telephone screenings to filter out unsuitable suppliers based on critical criteria such as manufacturing capabilities and export licenses.
- RFI/RFQ Management: Managed the RFI/RFQ process, analyzing responses to calculate the total delivered price, including logistics and import duties.
- Supplier Shortlisting and Audits: Sellers were shortlisted based on RFI/RFQ scores, and audits were conducted to ensure compliance with client requirements.
- Sample Development and Final Negotiations: Selected 2-3 suppliers for sample development, conducted final negotiations, and finalized contracts.
Supplier Evaluation
Ten sellers participated in the evaluation, which scored them on business information, production capacity, quality systems, and RFQ responses. The highest score was 76, and the lowest was 33, with an average of 59.
Cost Analysis:
- Breezy Sun Canopy: The lowest FOB price is $9.92; the highest is $18.63; the average is $14.48.
- Seat Liner: The lowest FOB price is $8.05; the highest is $16.17; the average is $9.90.
- Footmuff: Lowest FOB price is $11.92; the highest is $24.06; the average is $15.95.
Vietnamese suppliers offered competitive pricing but lacked specialization in baby stroller fabric products. Despite this, the import tax from Vietnam to the EU was lower than from China, providing a cost advantage. The client planned to engage all ten suppliers for further details and might require Dragon Sourcing’s assistance in audits next year.